"If there's a lack of homegrown products due to drought, then they (food) will have to be brought in from abroad, and at prices that are higher than those produced here. This means the prices the consumer pays for these products will remain high or even rise," said Jaume Bernis from COAG.
In the month of April, Spain exhibited the most minimal inflation rate among European countries, recorded at a value of 3.8 percent. Nonetheless, the cost of food persists at elevated levels, having escalated by approximately 16.5 percent since March 2022, as reported by Spain's national statistics institute (INE).
Bernis explained that the elevated food prices observed in Spain are caused by the escalated prices of raw materials, energy, and fertilizers, which have surged by up to 45 percent.
I was recently in Gran Canaria (Spain) 6 eggs €3.90 about £1.80 in the UK. Other UK customers in the same shop were staggered at how expensive all the food was! The only product significantly cheaper was booze. Most food was 2-3 times the price in the UK, even local produce!
"The cost of grain is falling, energy costs are falling, and while fertilizers are not going down, this could be a first sign that the cost of food could begin to fall," said Bernis.
However, he cautioned that the lack of precipitation might impede the realization of this outcome. The current drought's impact on the ensuing grain harvest carries the potential to elicit a resurgence of elevated prices for the essential raw materials utilized to feed livestock.
"If the drought continues it will also endanger the production of fruit, almonds, hazelnuts, all those types of products that apart from domestic consumption we also export," said Bernis.
According to the statistical data provided by INE, vegetable prices have exhibited the most pronounced escalation among all food products during the initial phase of 2023 in Spain, with an inflation rate of 17.7 percent.
The current year has witnessed an escalation in the prices of basic food commodities, such as sugar, butter, and olive oil, with percentages of 50.4, 37.7, and 32.1, respectively.
Bernis indicated that the ongoing drought in Spain could engender ramifications for the agricultural sector through the transition of some farmers to alternative crops that require less water, thus, resulting in a transformation of the agricultural landscape throughout the nation.