The cost of agricultural products is rising, while prices are falling

What is happening to the prices of various agricultural crops and which ones were worth banking on at the beginning of the year was examined by an analyst of the World of NAN editorial board.

On average, if you look at the producer price index for agricultural products over the past year, it has fallen by 4.9%, which is quite bad news, given the inflation, which is now about 10%. Conventionally, the cost of production could have gone up 10% and the price dropped 5%, which severely impacts the profitability of the business. Last year we could see a similar situation. True, then the average producer prices rose by 11.1%, but inflation also reached almost 20%. If we do not take into account various support measures, the margins of agricultural business have probably decreased on average over the last two years.

The prices of crop growers decreased the most, by 7.8% over the last year, although last year the average price increase was 10.5%. Cotton (-21%), buckwheat (-13%) and wheat (-13%) fell in price the most. In November, the average producer price of cleaned cotton reached 223 thousand tenge per ton, and wheat 101.6 thousand tenge. Producers of grapes (+42.5%), millet (+8.4%) and rice (+8.4%) gained the most.

In livestock farming, on the contrary, the average price of goods increased by 3.6%. The same strong dispersion of price changes in this sector is not observed. The prices for cow milk (+9.1%), horse meat (+7.7%), cattle (+4.6%) and sheep (+4.5%) increased the most. But the prices of the following livestock products decreased over the last year: pigs (-1.5%), wool from sheep and goats (-1.1%), eggs (-0.3%) and poultry (-0.1%).

It turns out that the impact of agricultural producers alone on retail prices is small, given the difference between the increase in the prices of their goods and general inflation. Further increase in local production and reduction of dependence on imports may have a positive effect on price growth in general in the long term.

More analysis can be found in the World of NAN Telegram channel.

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