THE rise in electricity costs is responsible for an increase on average of 1.5% in food prices throughout the Balearic Islands.
According to Consumer Price Index (CPI) prepared by the National Institute of Statistics the soaring costs have increased since January with some items seeing a much higher price hike regardless of the supermarket chain supplying them.
Cooking oil prices have risen 22.6% in just seven months. Bread is up 1.5%, eggs 2.2%, and mineral water, juices and soft drinks up to 9%.
One of the reasons for the increase in food prices is the rise in electricity prices. Producers are forced to pass on the increased cost of energy, which in turn is passed on to the consumer. And this trend will continue, according to the technical director of the Fundació Impulsa, Antoni Riera.
“The high price of electricity in August has resulted in an increase in costs for companies in that month, but the consumer will receive this increase in November,” said Riera in Ultima Hora.
This rise could be extended further as the cost of electricity continues to rise. The average daily price of electricity in the wholesale market will skyrocket today to a new all-time high, reaching €140.23 per megawatt (MWh), almost €8 more in just one day and thus setting its fourth consecutive record.
However, there are other factors to explain the increase in some commodities. Riera referred to an increase in demand which has exceeded supply. “Some supplies are not yet standard and their process is slower than normal. As there is less stock, products become more expensive,” explained the economist.