ECONOMY

Officials worry about the effect of vegetable price rises on inflation

Every day, consumers pay higher prices for fruit and vegetables, causing concern to the government over the impact of prices on inflation, especially if the present inclement weather persists. Since last Thursday, the prices of fruit and vegetables have risen up to 34 percent. And if we include the price rises since the beginning of the year, the rises can amount to 200 percent. Damage to crops from snow, ice and wind are great, producers’ representatives claim. Their claims cannot be corroborated, because the assessment of the damages has barely begun. The available data from Magnesia prefecture, in Thessaly, show that more than 30 hectares of crops have been damaged. Another factor that affects prices is the difficulty of transporting goods because of snowbound roads across the country. This creates a scarcity in the markets and drives prices upward. Market insiders say, however, that while the rise in the prices of fresh vegetables is understandable given the prevalent weather, «in citrus fruit [it] is inexcusable, because the fruit has long been gathered.» About half of the 17 fresh vegetables whose prices are monitored by the Ministry of Development have risen from 1.6 percent to 34 percent since last Thursday. The greatest increases are in spinach and chicory. According to the Prices Observatory, which provides up-to-date, online information to consumers, spinach is selling was selling yesterday for an average of 1.77 euros per kilogram from 1.33 euros last Thursday, a rise of 33.08 percent. Its price yesterday was 70 percent higher than on December 30, 2003, when it sold for 1.04 euros per kilo. The average price of chicory rose to 1.68 euros per kilo yesterday from 1.33 euros last Thursday, a rise of 26.31 percent. At the end of December, its price did not exceed 1 euro per kilo. Carrots were selling for 1 euro per kilo yesterday from 87 cents last Thursday, up 14.94 percent, and spring onions are selling for close to 2 euros per kilo, up from 1.70 euros last week. Eggplant has now become almost a luxury item, selling at 3.05 euros per kilo, up from 1.40 euros at the end of December, according to Prices Observatory data. Vegetables are not the only basic foods affected by the cold weather. The price of bread has risen 10 percent and flour by slightly less. By the end of February, higher prices will also appear for items sold at grocery stores and supermarkets. Prices of olive oil and wine are expected to exceed the pace of inflation – currently at 3.1 percent – but Development Ministry officials are optimistic that rises in other products will be below inflation level. Deputy Development Minister Kimon Koulouris, appointed last summer to fight inflation and known for his high-visibility efforts to shame producers and retailers into containing prices by showing up at open-air markets or meeting with producers and retailers to apply some not-so-gentle pressure, has yet to meet with industrialists and retailers this year. A little before Christmas he had said he would hold such a meeting to gauge producers’ and retailers’ pricing policies for 2004 and, if necessary, to goad them into yet another «gentlemen’s agreement» to keep prices low. The looming election, and the leadership change within the ruling Socialists, seems to have claimed Koulouris’s attention.