For several months, economists in Germany have been warning of inflation caused by COVID-19, a shortage of truck drivers, post-pandemic reopening and energy price hikes. The Russian military offensive in Ukraine is now adding to the cost of living crunch. As the conflict enters its second month, we explore the products that could be directly affected if the war continues to rage.
Russia is one of the world’s largest producers of ammonia, a key component of agricultural fertilisers that are used to grow crops. The conflict has not only created disruptions to the supply and production of ammonia, but sanctions have also made its export more difficult.
The fertiliser shortage will have a knock-on effect on the price food: specifically meat and dairy. Due to the rising cost of growing crops, it will become more expensive for farmers to feed their livestock, thus pushing up prices of meat and dairy products in Germany. Asparagus farmers in Germany have already expressed their concerns about the rising cost of agricultural products caused by the conflict. Analysis undertaken by Focus Online has shown that since the start of the year, the price of dairy products has increased by up to 5 percent.
German bread is universally adored by the country's residents, but the rising cost of wheat could make a humble loaf cost a small fortune. Ukraine is known as the breadbasket of Europe and one of the key consequences of the war has been the destruction of fields, equipment and storage facilities used for the production of wheat products.
This has caused an increase in the cost of wheat based products such as bread and pasta. According to Focus, the price of pasta has increased by up to 40 percent since January this year.
While this is undoubtedly more expensive, the situation in Germany is still less severe than elsewhere. Many North African and Arabian countries including Tunisia, Libya, Egypt and Yemen are even more heavily reliant on wheat exports from both Russia and Ukraine.
Much as is the case for fertilisers and wheat, Ukraine and Russia are also key producers of cooking oils, such as sunflower oil, vegetable oil and rapeseed oil. The war has disrupted farmers’ ability to grow the required crops for making cooking oils, while the cost of fertilisers for growing crops has pushed the price up even higher.
The rising price of sunflower oil comes at a difficult time, since other forms of cooking fat are also suffering from price increases. While butter and dairy products are going up in price due to the war, alternative oils such as olive oil have been rising in price for some time. Concern about potential shortages of cooking oils caused a run on the shops in Germany earlier this month.
There are, of course, other products rising in price - namely fuel and gas. Drivers in Germany have been feeling the pinch for the past month, while homeowners have witnessed their utility bills soaring since autumn 2021.
Retail experts say that Aldi and Lidl set the standard for German supermarkets, with their example often followed by other stores. Last week, Aldi Süd and Aldi Nord increased the prices of around 140 items in store; even more products were made more expensive if you count different flavours and sizes of the same products.
A spokesperson for Aldi Nord and Aldi Süd said the market had been strained for months but the new crisis in Eastern Europe had added to the burden. “The situation has been exacerbated by the war in Ukraine,” the spokesperson confirmed. “We would like to point out that our margins do not change as a result of this move,” they added.