Rising Commodity Prices in Kharkiv, Ukraine

Caviar on Sale in the ATB Supermarket in Kharkiv, Ukraine

At the start of 2016, commodity prices in Kharkiv, Ukraine’s second-largest city with about 1.5 million people, experienced a monthly average increase of 4.1%, according to the State Statistics Service of Ukraine. Moreover, while this figure is lower than Lviv (5.7%) and Dnipropetrovsk (5.2%), Kharkiv residents have seen prices for dairy products, pasta, flour, and sugar increase by nearly 50%. Eggs, in particular, are becoming unattainable, with a dozen selling for 20 hryvnia [85 cents] up from 9.59 hryvnia [41 cents] in late-2013.

Prices will continue to grow in 2016 due to the unstable economic situation in the country and the [weak] rate of the currency. This will affect all goods, especially groceries.
— Male, 22 years old, Student

Rising commodity prices are directly tied to Ukraine’s economy. Beset by soaring inflation — 44% as of 29 December 2015 according to official figures — and a currency that has lost 65% of its value against the dollar since the start of 2014, Ukraine’s economy has significantly weakened consumer purchasing power in Kharkiv, despite average wages increasing in the region by 414 UAH [17.7 USD] in 2015.

In fact, figures from June 2015 showed that Ukrainians were spending nearly 50% of their monthly income on groceries. Moreover, weak consumer purchasing power has begun to affect farmers in the region. Farmers, facing lower consumer demand, rising production costs, and new government tariffs, are beginning to see their incomes decrease.

There are no shortages, mainly because people’s purchasing power is below average. In fact, I’ve noticed some oversupply and supermarkets are forced to discount their goods.
— Male, 35 years old, Accountant

Locals hope Ukrainian Central Bank estimates that inflation will decrease to 12% in 2016 are correct. Locals reported the belief that this will positively affect commodity prices but remain wary after Ukraine’s embargo on Russian goods which went into effect on 06 January 2016. Though prices will most likely continue to increase in the 2016, an increase in local production could prolong a 2015 trend that saw Ukrainian favoring domestic products.