Russia, cheap fuel, poor harvests keep prices down

Cheap oil, poor global harvests, tough competition, and the Russian embargo on European products are all factors which have held the prices of foodstuffs down at around the same level for over a year. But this doesn't mean that prices of groceries haven't moved at all over six years; with prices on average rising by 17.2 percent since 2009. This was reported in the Hospodárske Noviny daily on Wednesday. "The European market is overstuffed with groceries thanks to the [Russian] embargo", said Terno supermarket analyst Ľubomír Drahovský. Some products are even cheaper than six years ago when Slovakia introduced the euro currency. Pork, oil as well as rice and sugar are all cheaper than they were in 2009. "The price of sugar has decreased due to a drop in its consumption and its replacement by high fructose corn syrup produced from maize", said Trade and Tourism Association president Pavol Konštiak. The reductions in prices mainly concern foreign products. Over the past four years the share of Slovak groceries in shops has increased from 49 to 63 percent; but, for instance, the Poles have 8-percent value added tax, while Slovakia has 20-percent VAT, incentivising exports to Slovakia for Polish producers. Bullish pricing schemes are also being prevented through greater competition between shops. "Food prices are politically very sensitive, and shopkeepers know very well that they can't exaggerate them", said Slovak Agriculture and Food Chamber spokesperson Jana Holécyová. Clothes and electrical appliances are also not so expensive. In this case technical progress is playing a part as every year newer and more modern devices come onto the market, replacing the old ones and thus making them cheaper.