Food industry: Dairy prices have peaked, meat prices may rise further
While dairy products have soared in price by as much as 40 percent on year, with meat products, the figure is 25 percent. However, whereas there is still scope for meat prices to continue to rise, dairy prices may have topped out, ETV news show "Aktuaalne kaamera" (AK) reported Tuesday.
Nonetheless, even these soaring prices do not cover costs, food industry spokespersons say, meaning the sector is generally still running at a loss.
Meat prices look set to rise further; Markus Kirsberg, CEO of HKScan Baltic, Estonia's largest food producer, told AK that: "So far as consumers are concerned, inflation derives primarily from the decisions of suppliers; after all, price increases are negotiated on an ongoing basis. We and our competitors have openly stated this."
Maido Solovjov, head of the Estonian arm of Finnish dairy firm Valio, told AK that mil-derived products had basically increased by a half, due to soaring input prices.
He said: "We could state that in the various categories over the past year, the average price increase is somewhere around 40 percent, or a little more.
This meant that the inflation had essentially peaked, Solovjov went on.
"We don't see that there is any space in which prices can rise further .Although we don't know what energy prices will do tomorrow, I personally think that this price ceiling is at hand. We have also been seeing a slight fall in consumption; people's wallets have their limits."
Two-thirds of Valio's input costs consist of raw milk, which is now 65 percent costlier than it was a year ago, Solovjov said, adding this was a level which allowed producers to get by, without going out of business.
Tõnu Post, board chair of the Kõljala agricultural concern, said energy prices were still unpredictable, while feed, cereals and other inputs had also risen in price.
"Things have been manageable, so to speak, this year, but we can't estimate how things will look next year," Post told AK.
The Estonian Food Industry Association (Eesti Toiduainetööstuse Liit) told AK that the beverages sector, and also the fish produce sector, are the only ones that can more or less cope at present.
The meat industry's total losses have reached €20 million this year, while HKscan Estonia, which owns the Rakvere and Tallegg brands, as well as Estonia's largest pig farm, has also been operating at a loss, AK reported.
Markus Kirsberg said: "Things are extremely difficult. The results have been very negative, as we have seen from our stock exchange announcements, and there is nothing here we could call happy or rosy."
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Editor: Andrew Whyte, Marko Tooming
Source: Aktuaalne kaamera