After the substantial price increases of eggs and butter, one of the basic breakfast dishes - scrambled eggs - went up by almost half. Why has the increase in cost happened in Poland, where these products are purchased more often than all other EU countries? Marcin Lipka, Conotoxia senior analyst explains the situation.
A simple recipe composed of 4 eggs, 30g of butter and three slices of bread happens to be a favorite breakfast for many Poles. For scrambled eggs, according to Eurostat data, we paid approximately 3.04 PLN in 2015. In December of last year however, it jumped to over 4.30 PLN, which is about 42% more. In only two EU countries has there been such a huge hike in the cost of making scrambled eggs. Why is Poland in this group?
Eggs and butter prices skyrocket
The basic reason for the increase in the cost of scrambled eggs cost is obviously the higher retail prices of eggs and butter. In Poland, compared to the average level in 2015, they rose by 47.8% and 49.1%, respectively. In the case of eggs, higher increases were only recorded in Slovakia, the Czech Republic and Romania. Butter, on the other hand, was more expensive in the 3 Baltic countries and Germany. Overall, when taking into account the increase in bread prices (price rose by 5.3% in Poland, the fifth fastest increase in the EU), only two countries - the Czech Republic and Slovakia - were ahead of us in scrambled egg price increases.
Almost the highest prices in Poland
The butter and egg market crisis in 2017, of course, caused a rise in the wholesale prices of these products.
Egg expenses are definitely more detailed than butter, and data is available for practically every EU country. Before the crisis, the purchase price of 100 kg of eggs (at the end of July 2017) was 123 EUR in Poland, which was slightly above the EU average (less than 120 euros).
At its peak which was the last week of November 2017, the price jumped to 220 EUR (nearly 80% increase compared to July). Interestingly enough, the average increase in EU prices was 20% less, amounting to 60%. As a result, in the past four months, wholesale egg prices were closer to the EU average becoming the fourth highest in the EU.
In the case of butter, EU prices are only determined in a few markets (Dutch, French, German and Polish). In Western Europe, the changes were more rapid than they were in Poland, both in terms of increases as well as decreases. As a result, according to the report of the Ministry of Agriculture and Rural Development (MRiRW) published on January 25, the sale price of butter in blocks in Poland was 417 EUR per 100 kg. This is more than in Germany (413 EUR) and the Netherlands (404 EUR). In December, prices in Poland were even higher at 10-15% more than in Germany or the Netherlands.
Consumers get only increases and no decreases?
The issue of strong increases in food prices in the EU was already widely discussed by the European Commission (EC) in 2009. At that time, agricultural commodities were significantly increased, which quickly translated into a sharp rise in prices for consumers. However, when the prices of agricultural commodities returned to previous levels, their retail counterparts practically never decreased.
At that time, the EC drew attention to the various negotiating positions of individual entities (farmers, processors, wholesalers, and retailers) in the food supply chain. According to the EC, some investigations have led to the discovery of many serious infringements, such as cartels.
The EC has been providing tools for price monitoring for several months. For now, this is experimental, but in the case of Poland it shows that food price increases in 54% of cases are passed on to consumers. In turn, price drops are only passed on to consumers in 28% of cases. In Germany, however, both price increases and drops are passed on to consumers symmetrically - 47.2% and 44.6%, respectively.