Recent developments in euro area food prices

Ieva Rubene

Economic Bulletin Boxes, 2020, vol. 5

Abstract: Food prices are an important driver of euro area HICP due to their sizeable share in the consumption basket and their volatility. This box reviews the food price increases in April 2020 and finds that they were unusual in terms of their size and the circumstances surrounding them. The developments in April 2020 most likely reflected strong increases in demand combined with supply-side effects related to the lockdown and containment measures caused by the coronavirus (COVID-19) pandemic. Owing to strong food sector supply linkages within the euro area, the disruption of supply chains within the euro area observed during the COVID-19 pandemic may have had important implications for the food supply and consumer prices. To conclude, the box highlights that, while the May and preliminary June data show signs of normalisation in price changes, the possibility remains of upside price pressures in the short term and downside price pressures in the medium term. JEL Classification: E31

Keywords: coronavirus; COVID-19; euro area; food prices; HICP; supply linkages (search for similar items in EconPapers)
Date: 2020-07
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