“It won’t be long”

These foods could become more expensive due to the war

Economist Sinabell estimates that staple foods, in particular, are likely to become more expensive as a result of the war.(Bild: Denys Kurbatov - stock.adobe.com)

The war in Iran has sent prices for oil and other commodities skyrocketing. Experience shows that “it won’t be long” before Austrians feel the price hikes at the supermarket checkout, says economist Franz Sinabell. He also has a hunch about which foods might become more expensive first.

The reason for the rise in food prices is that higher energy costs are driving up production and transportation expenses, explains Wifo agricultural economist Sinabell. The expert expects staple foods in particular to become more expensive. Experience shows that price increases are most likely to occur first in oil, flour, and butter, followed by other dairy products. However, he cannot predict how much prices might rise, the economist told the Austria Press Agency. 

“I’d be happy if I were wrong”
In general, however, he expects “this to affect all product categories,” even if some foods, such as apples, are less dependent on global markets. “I’d be happy if I were wrong,” the economist assures. “Lessons have been learned” from similar situations in the past, says Sinabell. That’s why he’s confident “that this is just a hiccup, but we won’t end up in chaos.”

Expert Sinabell fears that products like grains could become more expensive.(Bild: Lucas Wahl)

Energy prices are a key factor
Energy prices have a major influence on how much food costs: “When prices for certain energy sources rise, energy generally becomes more expensive overall,” says Sinabell. “When crude oil becomes more expensive, for example, gas also becomes more expensive,” explains the expert. And that has an impact: “Transportation requires energy, but so do milling and freezing. It really affects everything.”

Transport and production becoming more expensive
Another factor is that wheat and rapeseed can be used to produce not only food but also fuels. When prices for diesel and other fuels rise, it becomes tempting for producers to secure a piece of the pie by selling fuel instead of flour or oil.

Fertilizer is becoming scarce
Farmers face the challenge of nitrogen fertilizer becoming more expensive and scarce. This is because a large portion of the world’s fertilizer is produced in the Middle East. Due to the attacks in the region, production facilities have come to a near standstill.

Farmers’ representatives alarmed
Farmers’ representatives, such as the ÖVP Farmers’ Union and Land&Forst Betriebe Österreich, have also recently expressed alarm. “Current developments show once again how heavily agriculture depends on stable energy prices. Without diesel, our family farms cannot cultivate their fields or produce food,” said Farmers’ Union President Georg Strasser, referring to rising fertilizer and diesel prices. Targeted relief measures for farmers are therefore needed.