Ukraine to Face Disastrous Increase in Food Prices - Experts

In Autumn, the ongoing devaluation of the Ukrainian national currency will trigger a serious food shortage, analysts warned.

Ukraine is nearing an unprecedented spike in food prices, experts warned. In the coming weeks, the inflation rate in Ukraine will remain at a relatively low level, but in autumn it will go up, Yury Gavrilechko, analyst from the Public Security Fund, said.

"Currently, the inflation rate is low not because of the government’s efforts but because of the fact that we are nearing a milestone. After that, we’ll face massive plant shutdowns and a serious food shortage," he said at a press conference.

"Now the balance of supply and demand is maintained through the gradual decrease in supply," he added.

The expert further explained that the root of the disastrous situation is in the large debt load of Ukrainian companies. With the ongoing hryvnia devaluation against the US dollar, companies and sellers are at risk of increasing their debts. To avoid that they would have to increase prices.

"This autumn, the food prices will be based on the loans farming companies received in February and March. Autumn is the deadline for paying them off. As a result, despite this year’s heavy crop, the prices of all food products will rise," Gavrilechko added.

Recently, the inflation rate in Ukraine reached over 60 percent. The weakening national currency devaluated people’s income which sits at an average of $510 a month.