(MENAFN) Spain is currently experiencing a surge in prices for tomatoes and pork due to geopolitical tensions and burgeoning demand from foreign countries. The billionaire owner of Spanish supermarket chain Mercadona, Juan Roig, explained that the Russia-Ukraine conflict has heavily impacted tomato prices as it resulted in a sharp surge in prices for natural gas, forcing farmers in Northern Europe to shut down production of vegetables in greenhouses due to high heating costs. This caused buyers to flock to Spain's solar-powered growers, pushing up prices from €1.39 per kilogram in January 2021 to €2.05 today. As a result, the supermarket chain has raised prices by 50% to cover the increased cost.
Roig also reported that the price of pork, a vital ingredient for making Iberian ham, has skyrocketed due to soaring demand from China, for which Spain is a major supplier. The businessman noted that the country's one billion Chinese consumers have caused the price of pork to increase from €1.05 per kilogram in January 2021 to €1.96 today.
These rising prices for tomatoes and pork have contributed to Spain's Consumer Price Index (CPI) for food standing at 16.6% in February, the highest level since 1994, according to the country's national institute of statistics (INE). This is despite the IVA (Spain's sales tax) reductions adopted during the previous month.
Overall, Spain is facing a challenging economic environment due to geopolitical tensions and foreign demand for its products. While the country is experiencing a surge in prices for tomatoes and pork, it remains to be seen how long these trends will last and what impact they will have on the wider Spanish economy.
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