During the 1,5 months of the war, the cost of borshch in Ukraine increased by 13%

This is evidenced by a recent “borshch index” from BRDO experts. When calculating the index, we use official data from the Ministry of Finance on average monthly food prices. Unfortunately, at present we cannot confirm the relevance of the index for the regions of Ukraine that are in the zone of active hostilities.

How did the war affect the prices of basic products?

UAH 92.49 – that is how much a portion of borshch for four people, prepared according to a traditional recipe, will cost on April 15, 2022. Compared to March 1, 2022 – UAH 81.84 – the price increased by 13.02%.

All borshch ingredients, except white cabbage, rose in price to varying degrees: from a slight 3% to a significant 21%.

The price of meat has risen the most. Next on the price scale – potatoes, carrots, sour cream.

The only vegetable whose price decreased was cabbage (-5.38%). Beets did not rise in price (+ 3.01%).

What does this data say?

According to Yulia Korneeva, chief economist of BRDO, the main reasons for the rise in meat prices in Ukraine include the increase in production costs: there is a rising price dynamics for feed and veterinary drugs, and transport costs have increased significantly.

Due to low profitability, it is becoming unprofitable for producers to raise pigs, while it is also extremely difficult to cover the shortage of products with imports. The rupture of logistics supply chains will lead to shortages in some areas, which will certainly cause further price increases.

At the moment, a dramatic drop in the purchasing power of the population, which is forced to save by giving up meat, is a deterrent to even higher pork prices.

What happens next?

The market is saturated with products that producers will not be able to export at the moment, which will have a positive effect on price dynamics in the short term.

However, in the long run, inflationary pressures will increase. The loss of export revenue will lead to a significant reduction in the profitability of producers, who will later try to compensate for losses. Prices will also be affected by rapid growth in logistics costs, energy costs, seeds and fertilizers.

This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of BRDO and do not necessarily reflect the views of the European Union.