Greece is the champion in price increases for agricultural products among European countries in the first quarter of 2024.
According to Eurostat data, at the national level, most EU countries (21 out of 25 with available data) recorded a decrease in nominal agricultural output prices in the first quarter of 2024, compared to the same quarter of 2023. The largest price declines were recorded in Hungary (24%), Bulgaria, Romania (both 18%) and Slovakia and the Czech Republic (both 17%).
By contrast, prices increased in 5 southern EU countries, with Greece recording the highest increase by far at 20%, followed by Malta and Spain with comparatively milder increases of 4% and Portugal, Cyprus (1%).
At European level, in the first quarter of the year the average price of agricultural production fell by 6% compared to the same quarter in 2023. An analysis of Eurostat data, the index relating to all crops, including fruit and vegetables, in real terms, indicates that in Greece the increase is 27.2%, followed by Luxembourg with 14%, Portugal with 5.9%, Spain with 5.7%, Malta with 3.6%, Slovenia with 3.1% and Germany with 1.2%.
What triggers the rise in prices in Greece?
Why do producer prices seem to have such large deviations in Greece compared to the rest of the European market? The answer depends on many factors.
Firstly, olive oil and fresh fruit and vegetables are the ones that are keeping the producer price index at very high levels. As far as olive oil is concerned, the rise in prices is a consequence of the reduction in production. Signs of improvement are expected in the new growing season, both in Spain, which acts as a barometer of developments, and in national production, which this year has been at very low levels, in the order of 20-25%, in several regions.
Regarding the evolution of prices for fresh fruit and vegetables, the reality for national producers is that they do not develop the same adaptation reflexes compared to large-scale crops on the European market. In addition, extreme weather events have affected or destroyed harvests. The small batch size combined with the lack of organisation among producers to achieve economies of scale makes national producers particularly vulnerable to exogenous risks.
The destruction in Thessaly, but also the effects of the drought, which affects almost all national production, are other factors that contributed to the increase in costs.
At the same time, a large part of national producers has been walking a tightrope since 2020, after the Covid-19 crisis that affected the sector’s finances and many agricultural activities continue to face difficulties.