Are prices rising everywhere? Discover the reasons behind the increasing food costs in Ukraine and what to expect in 2025.

Prices for essential food items, such as vegetables, bread, dairy products, and meat, are expected to gradually rise throughout the year. However, the arrival of the new harvest anticipated at the end of spring may slow this process. At the same time, various factors will influence the extent of price increases for food products.

To find out how much prices may rise, and which items might actually decrease in cost, read the review by journalist RBK-Ukraine Alik Sakhno.

According to data from the State Statistics Service, in 2024, prices for food and non-alcoholic beverages increased by 14.1%. Thus, the annual food inflation was nearly 2% higher than the overall inflation rate. The largest price increases were seen in vegetables and oil, which rose by 48.3% and 33.9%, respectively. Prices for alcoholic beverages and tobacco products increased by 13.2%. The only category that saw a price drop was clothing and footwear, which decreased by 4.3%.

How Much Will Prices for Basic Products Increase

Professor at the Kyiv School of Economics and president of CFO Club Ukraine, Mykhailo Kolesnyk, predicts that food inflation will exceed 10% by the end of the year. He adds that prices for certain products may vary significantly due to supply and demand.

"In the coming months, a gradual increase in prices for essential products is expected, particularly for potatoes, carrots, onions, and eggs. However, the growth rate will be moderate, estimated at 1-1.5% per month. In the summer, when the new harvest arrives, prices may fluctuate. If the harvest is good, these products could become cheaper. However, most factors indicate that prices will still rise. At the same time, the prices for raw materials and equipment will increase moderately, which will help reduce the average inflation rate to 10-12%," – Mykhailo Kolesnyk explained in a comment to RBK-Ukraine.

Alexander Parashiy, head of the analytical department at Concorde Capital, believes that vegetable prices may increase by 2-4% per month, especially for ingredients in borscht, such as potatoes, onions, and carrots. This seasonal price increase may last until May-June, with a potential drop in prices after the new harvest is collected.

"However, this decrease is unlikely to be significant, as several factors will influence pricing, particularly the rising cost of production, which depends on labor costs and weather conditions. The most substantial impact on food price increases has been due to hot weather conditions, which negatively affected the harvest," – added Alexander Parashiy.

The expert notes that there is currently a seasonal decrease in prices for eggs and meat in Ukraine. Furthermore, Parashiy highlights a trend towards lower prices for clothing and footwear, although this process may slow down or even halt significantly due to the rising dollar exchange rate throughout the year.

According to Yaroslav Zhalilo, deputy director of the National Institute for Strategic Studies, Ukraine is currently at a price plateau following significant food price increases last autumn.

The expert explains that prices in Ukraine have reached a level where the purchasing power of the population no longer allows for significant price hikes. This forces producers and retailers to slow down price increases. However, in his opinion, a decrease in prices is unlikely to occur directly. Instead, retail chains may stimulate consumers through promotions. Yaroslav Zhalilo predicts that food prices will fluctuate between 0.5-1% per month in the coming months.

How Prices in Stores May Change Throughout the Year

Food prices in stores and markets may vary by 10-20%. Additionally, retail prices depend on the sales location and factors such as demographics, logistics, and the purchasing power of specific cities or regions.

Currently, the price for a dozen chicken eggs in online stores like ATB, FOZZY, Silpo, Metro, Tochka, Epicenter, and Novus averages 60 hryvnias. If egg prices rise by 1-2% monthly, their cost could range from 68 to 76 hryvnias by the end of the year.

With this level of inflation, prices for basic products may change as follows:

• Potatoes – the average price per kilogram is 35 hryvnias. A price increase throughout the year to 40-45 hryvnias is possible.

• White cabbage – the average price per kilogram is 40 hryvnias. A price increase throughout the year to 45-50 hryvnias is possible.

• Carrots – the average price per kilogram is 32 hryvnias. A price increase throughout the year to 36-40.5 hryvnias is possible.

• Onions – the average price per kilogram is 16 hryvnias. A price increase throughout the year to 18-21 hryvnias is possible.

Bread currently costs an average of 22-25 hryvnias. If the price of this product rises by 1-2% monthly, its cost could eventually reach around 28-32 hryvnias per loaf. However, it's important to remember that prices for individual products may fluctuate from month to month due to various factors. For instance, in October 2024, egg prices increased by 18.5%, but then decreased by 17% in December.

Why Food Prices Will Rise This Year

The trend of rising food prices observed last year will continue this year. In particular, prices for vegetables, fruits, and dairy products will gradually increase. At the same time, mobile communication tariffs may rise by 40-60 hryvnias, which will likely boost inflation and indirectly affect food prices.

Economist Oleg Penzin, in a comment to RBK-Ukraine, predicts that by the end of spring this year, vegetable prices may rise by 30-50%. This will be a consequence of last year's severe crop failures. However, high prices for borscht ingredients are already limiting imports from Europe, which will likely also contribute to their price increases.

Penzin emphasizes that it is challenging to accurately forecast price changes after the season begins due to weather conditions that can have both positive and negative impacts. Regarding bread, the expert believes that its price could rise by 15% by the end of the year, amounting to a few hryvnias.

"Egg prices are currently falling sharply. The current price for eggs is 40 hryvnias per dozen. On one hand, this is due to decreased demand, and on the other hand, the Antimonopoly Committee began investigating a possible cartel agreement among egg producers in October 2024. If collusion is confirmed, it could lead to significant fines," – asserts Oleg Penzin.

Yaroslav Zhalilo believes that the Antimonopoly Committee will not be able to significantly impact the reduction of chicken egg prices, as the Ukrainian market is quite competitive, and the price range in stores remains relatively wide. According to him, eggs traditionally become cheaper at the beginning of the year, while prices rise closer to the Easter holidays.

The expert adds that, in addition to poor harvests, price increases have also been influenced by storage issues for agricultural products, rising energy costs, utility bills, transportation, and labor costs.

"Another important factor has been inflationary expectations, which have risen due to the aforementioned reasons. This has compelled producers to increase prices for the next year's harvest. The rise in nominal wages has also aimed to enable citizens to pay more for goods. However, this effect is limited, as purchasing power varies. Pensioners and budget employees have hardly felt an increase in income, even though they are the main consumers of food products," – noted Zhalilo.

The expert also highlights that energy prices, particularly for fuel and electricity, significantly impact product costs. Increases in excise duties and taxes will also affect prices. If prices continue to rise, demand for goods may start to decline, as people, for example, may drive less or cut back on spending for other products, which, in turn, will affect overall consumption.

Recall that we previously reported on the prices of basic products in Poland and whether they are cheaper than in Ukraine.

This material was prepared using comments