Why did food prices in Serbia go up twice more than in the EU?

A competitive market is the greatest advantage of modern society, said the governor of the National Bank of Serbia, Jorgovanka Tabaković, and warned that precisely the lack of market competition could slow down the decline of food prices.

Tabaković expressed her fear that downward inflation in the food sector could be threatened by a lack of competition at the recently concluded Kopaonik Business Forum, without specifying who and what she was referring to.

What we do know is that inflation affected all segments of the economy, and while the prices across economic branches went up by 15 percent on average, food prices rose significantly more, 24.3 percent – twice as much as in the EU.

The prices of milk, cheese and eggs jumped by as much as 43.3 percent, and the prices of most food products went up by more than 20 percent on an annual basis. Prices of meat and cooking oil went up by 21 percent, fruit by 20.2 percent and vegetables by 18.4 percent.

Economist Saša Đogović says that the lack of competition was particularly visible in the dairy sector since we were forced to import milk due to a shortage.

“It is obvious that this happened because of problems with the livestock policy and problems related to the purchase price of milk. It is the Ministry of Agriculture that must define appropriate milk premiums and incentives for the development of cattle breeding, especially now when there is a trend of constant decline (in the livestock industry),” points out Đogović.

He adds that If the agricultural yield is at least at the average level, then the offer should be more generous, and in that case, with adequate market inspection and control, possible cartelization of prices could be prevented.

“Retail margins are definitely a problem too, but I think that here specifically the problem is primarily with the producers. Low premiums and decreasing livestock are problems that need to be worked on and milk producers need to be additionally stimulated in order for their production to recover,” Saša Đogović notes.

(Luftika, 10.03.2023)


This post is also available in: Italiano

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