ANNUAL food shopping basket costs are expected to rise by €200 in Spain this year according to the latest Allianz European Food Inflation report.

The yearly food spend for an average Spanish family this year is projected to go up to €2,300 due to rising prices.

Food costs are lower than the EU average which comes in €200 higher per annum at €2,500.

Increases in fuel, electricity, and fertiliser costs caused firstly by the Covid-19 pandemic and then the war in Ukraine, are seen as the main contributory factors to the price hikes.

Events in the Ukraine have affected the supply of basic foods such as wheat and sunflower oil, with prices going up for alternative sources.

The Allianz report warns the situation could get much worse as current food prices are not rising at the same proportion as increases in raw material costs over the last 18 months.

It says that food and beverage producers in the EU have already increased their prices by an average of 14% since the beginning of 2021.

In supermarkets, the most significant price increases have been that of oils (+53 %), flour (+28%) and pasta (+19%),

The average of a full food shopping trip though has only gone up by 6% as retailers have absorbed around 50% of price hikes to consumers.

Allianz warns that high inflation coupled with reduced sales will add pressure to the profitability of businesses, which will probably work its way into a further ‘increase in consumer prices’.

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