TRUE OR FAKE. Is the war in Ukraine responsible for inflation?

“Why is there an explosion in prices? Because you have war in Ukraine”said the Minister ofEconomy, Bruno Le Maire, on the set of Quelle epoque! (France 2). Can the war explain the 5.9% inflation recorded in April? In France, two sectors are very affected: energy and food.

Regarding energy, the sanctions imposed on Russia in 2022 deprived European markets of Russian oil and increased prices, but not only. “The fact that the war continues tends to support costs. Second, the fact that crude producers (OPEC and Russia) continue to regulate production in such a way as to avoid a surplus and therefore a price collapse also supports lessons”explains Olivier Gantois, president of the French Union of Petroleum Industries.

Climate change and standards are also to be taken into account

Even if the price of wheat has returned to its pre-war levels, the price of products on the shelves is not falling. “From last May to today, the price of wheat is at 200 euros per tonne. There is a gap in the negotiation between the world prices that we see on the Euronext-type markets and the negotiations that are reflected on the shelves”explains Arthur Portier, Agritel advisor.

The drought in Spain has also caused a drop in rice and olive oil production. Sugar is champion with 50.3% over one year. The French national sugar union evokes the Ukrainian crisis, but also the deregulation of the sector by the European Union and the new environmental standards. The war in Ukraine and industrial margins therefore partly explain the inflation, but other factors must be taken into account.