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High food prices: Why olive oil and cookies are so expensive right now

High food prices: Why olive oil and cookies are so expensive right now

Despite the ever-decreasing inflation rate, the prices of some foods, such as olive oil and biscuits, have risen significantly in the past year. There are very different reasons for this.

On Thursday, the inflation rate fell to its lowest level since summer 2021. It is now only 2.5 percent. So prices across all goods are still rising, but not nearly as much as in the past two years.

The federal government assumes that consumer prices will rise by 2.8 percent this year. Last year it was 5.9 percent. The fact that inflation is lower this year is mainly due to falling energy prices. However, there was also an increase of 0.9 percent in food.

The interactive graphic above shows how food prices have developed over the last year. It is based on the consumer price index data from the Federal Statistical Office. You can hover over the individual lines to get information about other foods. The three foods with the largest percentage change up or down are highlighted. You can change the view accordingly by clicking on the buttons or in the graphic.

Olive oil and cookies: why these foods are so expensive

When you look at the data, you quickly notice that the price development of individual items sometimes varies greatly. Above all, olive oil and strawberries, but also cookies and orange juice, have become significantly more expensive compared to the previous year.

The high prices for olive oil can be explained primarily by the poor harvest yields in Spain. Extreme drought and heat caused them to collapse completely last year. Spain has a market share of around 70 percent in the European Union.

Prices are also being driven up by increased demand. Overall, this means that a bottle of olive oil is now around 46 percent more expensive than it was in January 2023. 100 kilos of extra-virgin olive oil from Spain costs over 900 euros. Two years ago it was still 250 euros. There is no price drop in sight.

Cookies have also become significantly more expensive in the past year. Market leader Bahlsen had already announced that it would raise prices in October. The reason is the prices for sugar and cocoa, which reached an all-time high in Europe last year. Ghana and Ivory Coast, where around 60 percent of cocoa is produced, experienced unusually heavy rains in 2023, which significantly weakened the harvest. Heat waves and more pests have also led to yield losses in sugar beet fields. The price of sugar has risen by three percent compared to the previous year. The price of cookies even fell by almost 27 percent.

Strawberries already had a hefty price increase last year. When it comes to fruits from Germany, the increased minimum wage for harvest workers is particularly important. The labor costs are particularly serious for berries because significantly more helpers are needed to harvest them. The bad weather also caused prices to rise last year. If you don’t want to go without strawberries and other fruit, you should switch to frozen goods. Here the price has even fallen by eleven percent in the past twelve months.

Butter and milk prices are falling drastically

Some other foods also currently give reason for hope. In many places, butter now costs less than two euros. Compared to the previous year, prices fell by around 18 percent in January 2024. The price of milk and butter is based on the classic principle of supply and demand. For a long time the price of milk was relatively high. Farmers responded by producing lots of milk. Consumers, on the other hand, tended to forego a pack due to the high prices. The resulting oversupply pushes the price down.

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Rapeseed oil and sunflower oil have also become cheaper again. After the start of the Russian invasion of Ukraine, sunflower oil prices exploded in 2022. Panic buying left supermarket shelves empty. The situation has now returned to normal despite the war. High inventories and falling raw material prices are causing prices to fall further. Compared to January 2023, prices have fallen by around 22 percent. The biggest price drop in this period.

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Source: Stern

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