Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Poland is selling 1,000 tonnes of its butter reserves to curb a surge in prices that has spread to politics ahead of May’s presidential elections.
The government’s strategic reserves agency announced the butter auction on Tuesday in response to a worldwide price increase that it blamed on “a shortage of milk”.
The agency said the sales of frozen 25kg blocks of the unsalted milk-based spread — available for a minimum price of 28.38 zlotys (€6.65) per kilo plus VAT — should “contribute to the stabilisation of butter prices”.
Polish supermarket chain Biedronka now sells butter at between 39.95 and 49.95 zlotys per kilo, depending on the brand, according to the retailer’s website.
Declining numbers of cows and outbreaks of diseases in Europe, alongside rising global demand, have put pressure on milk supplies, driving up prices of dairy products.
Butter prices in the EU have soared more than 40 per cent over the course of 2024, with the UN’s food agency reporting earlier this month that shortages of the dairy product in western Europe had helped push global prices to record highs in November.
While the spread only accounts for only 0.6 per cent of the average Polish consumer’s spending, the soaring cost of the staple good has featured in the campaign for May’s presidential elections.
This month Rafał Trzaskowski, the presidential candidate of the ruling party of Prime Minister Donald Tusk, mocked central bank governor Adam Glapiński’s claims of Poland’s economic success.
Trzaskowski accused the central bank of mismanaging inflation and offered to send the governor some butter “so he can see what this success looks like today”.
Tusk has been pushing for Glapiński’s removal, claiming he is an agent of the opposition Law and Justice party that put him in the central bank job.
Polish inflation was 4.7 per cent in the year to November, double the Eurozone rate.
“[Rising butter prices have] a high impact on sentiment,” said Rafał Benecki, chief economist at ING Bank Śląski in Warsaw, adding that Polish politicians are also taking their cue from the recent US presidential campaign and how “Trump managed to blame Biden for high inflation, which helped him win”.
Butter has also soured the mood among lawmakers in the neighbouring Czech Republic.
Last month, Prime Minister Petr Fiala claimed that “oligopolies” controlled and distorted prices — in particular Agrofert, a food and chemicals conglomerate that was built up by businessman turned politician Andrej Babiš, who now leads the main opposition party.
Babiš called Fiala “a fool” for misrepresenting Agrofert’s influence on butter pricing.
In Russia, high-profile thefts of the foodstuff have highlighted how soaring inflation has become a major challenge for the Kremlin.
Poland’s butter auction will start on Thursday, with individual bids accepted for at least 20 tonnes.
The country also stores other dairy products, as well as meat, cereals, sugar and animal fats among other foodstuffs.
Food reserves “are created to maintain the continuity of supplies necessary for the functioning of the economy and meeting the basic needs of citizens”, according to the agency’s website.
The agency would not disclose where and how much butter was kept refrigerated by Poland.
A large butter auction is unusual, but “every few months we have to rotate some food products” to keep good quality supplies, a spokesperson said.
Prices of other foodstuffs such as coffee and cocoa have also surged to record or near-record highs.
A price index compiled by the UN Food and Agriculture Organization rose to its highest level since April 2023, driven in particular by rising prices of vegetables oils and dairy products.
Additional reporting by Natalia Sawka in Warsaw
Source link : http://www.bing.com/news/apiclick.aspx?ref=FexRss&aid=&tid=6761c799d877416bb3fa9b100bf365c1&url=https%3A%2F%2Fwww.ft.com%2Fcontent%2Fd1c50820-0d9b-42f2-9b91-c7d28df3f4f2&c=457812740704566213&mkt=de-de
Author :
Publish date : 2024-12-17 10:36:00
Copyright for syndicated content belongs to the linked Source.
