Ukraine limits trade to tackle food inflation

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Ukraine’s government on Wednesday limited trade margins on a number of key food products in an attempt to stabilise food prices, which rose significantly over the past year amid the coronavirus pandemic.

Food inflation in December reached 13.3% year-on-year, while food prices increased by 11.3% over the whole 2021.

The trade margin should not exceed 10% of the wholesale price for buckwheat, sugar, wheat flour, noodles, milk, eggs, poultry meat and butter, the government said.

Inflation in Ukraine has exceeded 10% in the second half of 2021 for the first time since 2018, despite the central bank tightening monetary policy as it targets a rate of 5%.

Last month, the government decided to cap the price mark-up to 25% on gas sales to food producers aiming to stabilise prices.

Ukraine is one of the world’s leading food producers and exporters, however, producers say that more than a 10-fold increase in gas prices in 2021 has caused a rise in the price of most food products.

 

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