Logistics Restructuring in Ukraine May Lead to Food Price Increase of Up to 2.5%
Ukraine has sufficient food supplies for its domestic market; however, logistics chains are being restructured due to Russian attacks on food infrastructure. Taras Vysotsky, the Minister of Agrarian Policy and Food of Ukraine, stated that changes in the supply model could lead to an increase in food prices, but not more than 2.5%. Vysotsky noted that the new supply model involves placing goods in small batches and direct delivery from the producer to the point of sale. This also affects the operations of retail chains, which may have a smaller assortment, but this does not mean a shortage. Vysotsky emphasized that the transition to a decentralized model requires additional transportation costs and may change the cost of warehousing services. Despite the destruction of about 90% of food storage capacities due to Russian attacks, there is no threat of famine. In recent days, several enterprises have been affected: the confectionery corporation Roshen, the retail chains 'Avrora', 'Fora', and 'Kolo', as well as the warehouse of the Varus chain. These attacks have led to significant material losses and possible temporary disruptions in the supply of certain goods.
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