In a content we shared with you yesterday, we talked about the statements made by CBRT Chairman Şahap Kavcıoğlu. In his statements, Kavcıoğlu stated that the rate of increase in food prices is quite high compared to other countries. Şemsi Kopuz, President of the Federation of Turkish Food and Beverage Industry Associations (TGDF), speaking to Şehirban Kıraç from Cumhuriyet, said that these were better days.
According to the statements made by Şemsi Kopuz, almost all foods that we have to consume in order to sustain our lives, such as vegetable oil, legumes, bread and animal food, will increase. The reason for this is that the already high production costs do not decrease in any way, but on the contrary increase. Moreover, foreign dependence on some food sources such as vegetable oil will be felt directly due to the fluctuations in the dollar exchange rate.
Here is the TGDF President’s statement on what awaits Turkey
Expressing clearly that food prices will continue to increase, Kopuz made the following statements in his statements:
The domestic producer price index (D-PPI) reached a really high level of 45.52 percent annually as of August. Producer prices for food products increased by 39.20 percent on an annual basis, and 19.50 percent in beverages on an annual basis. The Consumer Price Index (CPI), on the other hand, increased by 1. 12 percent monthly in August, while the annual increase rose to 19. 25 percent. Food and non-alcoholic beverages group was the main expenditure group with the highest annual increase with 29 percent. And unfortunately, we saw the highest level in 28 months in annual food inflation.
From August 2020 to August 2021, producer prices increased by 39.20 percent in food and 19.50 percent in beverages, while consumer inflation in food and non-alcoholic beverages was 19.25 percent. This reveals that the food and beverage industry companies do not reflect the cost increases to their prices at the same rate, but undertake a part of the cost. In its monthly inflation assessments, the Central Bank draws attention to the pressures on consumer inflation stemming from producer inflation. Indeed, companies that try not to reflect cost increases in their prices rely on this pressure up to a point. If this high trend continues, price increases will be inevitable.
We feel the effects of the drought deeply with the decrease in the production of grains, forage crops and oilseeds, especially sunflower. According to the chambers of agriculture, losses of up to 80 percent were in question in Southeast Anatolia this year due to drought. Tobacco produced in the Aegean Region was also adversely affected by the drought. Producers in Manisa, Denizli, and Uşak reported a 30-60 percent loss of yield due to drought. The US Department of Agriculture stated that there was a great drought due to decreased rainfall in May, and the drought affected barley and wheat production. In the report, it was estimated that Turkey will import 11.5 million tons of wheat and 2.75 million tons of barley. Due to the drought, the yield of many products in many regions of our country was adversely affected. Although it is not named, this is a serious crisis, there is an alarming deficit in production.
While trying to close this deficit through duty-free imports, it is inevitable that the increase in the prices of the said commodity on a global scale will be reflected; This directly affects the final product prices. It should not be forgotten that the main goal is not to reduce product prices with imports, but to prevent further increases in food prices due to difficulties in raw material supply and increases in input costs. In this respect, importation is not permanent, it cannot and should not be an alternative to production as a periodic solution.
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