Bread with butter as a luxury item. Why are food prices rising in Ukraine, and what can we expect this spring?

How Prices Increased in Ukraine at the Beginning of the Year

According to the State Statistics Service, on the consumer market, in January, prices for food products and non-alcoholic beverages rose by 1.2%. Last month, the prices of vegetables, sunflower oil, bread, butter, processed grain products, meat and meat products, milk and dairy products, fruits, and fish increased. The most significant rise was observed in vegetables, which increased by 5.5% over the month. Compared to January 2024, the price of vegetables has surged by 33.9%. Overall, annual data on price index changes indicate that the most significant increases in Ukraine over the year were seen in butter, vegetable oil, vegetables, and bread.

Changes in Official Food Prices Over the Year*

*Source: State Statistics Service, price index in January 2025 compared to the price index in January 2024

The Executive Director of the Economic Discussion Club, Oleg Pendzin, states that the price increase, particularly for dairy products, will continue.

"Currently, we are experiencing a rise in prices. In January, there were holidays—demand tends to increase before holidays, especially for animal fats. Consequently, the price increase in January was more pronounced. However, this does not mean that prices will stop or reverse," explains the expert.

In general, annual data on price index changes indicate that the most significant price increases in Ukraine over the year were seen in butter, vegetable oil, vegetables, and bread.

He also notes the rise in prices for raw milk, which affects the cost of products in this category.

Vegetable Price Surge: Experts Identify Reasons for the Increase

In January, some vegetables from the borscht set became more expensive (+5.5%), such as potatoes, cabbage, beets, carrots, and onions. Ukrainians will have to get used to this situation. At least high potato prices in Ukraine will remain until the new harvest, and possibly longer, as experts from East Fruit indicate.

The current price of potatoes corresponds to the prices of imported products from the Netherlands, Poland, and Lithuania, which are ready to supply quality potatoes to the Ukrainian market. However, the poor harvest of seed potatoes in the Netherlands in 2023 complicated the import of high-quality seeds to Ukraine. The situation was further worsened by unfavorable weather conditions during the 2024 harvest. Additional factors affecting prices include the rising costs of plant protection products, fertilizers, labor, and electricity in recent years.

In January, some vegetables from the borscht set became more expensive (+5.5%), such as potatoes, cabbage, beets, carrots, and onions. Ukrainians will have to get used to this situation.

In addition to expensive vegetables, there are also high prices for apples and greenhouse products, such as cucumbers and tomatoes. The cost of greenhouse products in Ukrainian stores is driven by high prices in the domestic market and unfavorable weather conditions in Turkey, which traditionally supplies this group to the Ukrainian market during the winter period. Therefore, the trend of rising prices is due to the arrival of greenhouse products at high prices.

Currently, in Ukrainian stores and markets, a kilogram of tomatoes costs between 89–160 UAH. Prices for cucumbers have increased by 30% compared to the same period last year, with average prices ranging from 110–150 UAH/kg. However, these prices are expected to last until April, as Ukrainian greenhouse vegetables will start appearing in spring.

The Deputy Chairman of the All-Ukrainian Agricultural Council, Denis Marchuk, commenting on the situation with vegetable prices, agreed with Oleg Pendzin and also highlighted the lack of labor, particularly in agricultural enterprises.

"Field work has already begun, especially in the southern regions. If it warms up in February to nourish the winter crops, work will effectively have already started. The main issue remains with reservations, as the criteria are defined, but they are such that small farms, for example, cannot meet them. The burden of ensuring mobilization is overwhelmingly large for them. There is a catastrophic shortage of people," said Marchuk.

According to the expert, the situation is further complicated by issues related to fuel and lubricants.

Against the backdrop of rising prices for essential items in the consumer basket, it should be noted that in January, egg prices in Ukraine decreased by 23.1%, while prices for pasta and sugar dropped by 0.8% and 0.6%, respectively.

"When the law was passed in September 2024, it was stated that within three months a new draft law would be developed (and this was clearly outlined in the transitional provisions of the main law that increased fuel excise taxes), which would reduce the share of excise taxes for producers. This is because the machinery that works in the field would purchase under different excise rates. So far, such a draft law has not been developed. Starting from 2025, excise taxes have increased from 139 euros to 215 euros. The losses for businesses over the year will exceed 5.5 billion UAH," explained Marchuk.

The expert also identified another factor that significantly impacts pricing: the cost of energy, which is factored into production costs.

"Today, the systems used to store vegetables require more expenses. Now that the frost has begun, the use of electricity for storage will be more intensive. Overall, everything related to electricity usage is tied to the final price of the products we consume, whether it's milk, meat, or other products. Thus, it's impossible to say that some products depend on electricity while others do not," added Denis Marchuk.

Price Forecast for Spring: How Product Costs Will Change

Amid rising prices for essential items in the consumer basket, it should be noted that in January, egg prices in Ukraine decreased by 23.1%, while prices for pasta and sugar dropped by 0.8% and 0.6%, respectively. However, how long will these favorable prices last?

The Executive Director of the Economic Discussion Club, Oleg Pendzin, explained that preparations should be made for price increases on these products as well as on products in the budget segment. Due to the energy and