Significant Rise in Sweets and Dairy Prices: Import Costs Surge to Highest Level in Two Years

The cost of imported goods, particularly sweets and dairy products, has seen a notable increase, marking the steepest rise in import prices in over two years. According to data released by the Federal Statistical Office, the average prices for imported goods rose by 3.6% in February compared to the same month the previous year. This increase is the largest since January 2023, when import prices surged by 5.3%. Additionally, there was an unexpected rise of 0.3% in import prices from January to February, which economists had not anticipated, as they expected stagnation.

Germany's economy heavily relies on imported raw materials and components, which means that heightened import prices eventually contribute to overall inflation. In January and February, the inflation rate for consumers stood at 2.3% for both months, with economists predicting a slight decline to 2.2% for March. The Federal Statistical Office is set to release a preliminary estimate on this later today.

Imported food prices particularly experienced a significant hike in February, rising by 11.2% compared to the previous year. Among the categories with the most substantial increases were sweets (excluding baked goods), which soared by 61.7%. Moreover, prices for orange juice increased by 40.1%, apple juice by 33.6%, poultry by 27.2%, beef by 20.7%, and dairy products by 13.7%.

The sharp increase in sweet product prices is largely attributed to a dramatic rise in the costs of cocoa butter, cocoa fat, and cocoa oil, which skyrocketed by 119.4%, more than doubling over the past year. Additionally, the prices for chocolate and other confectioneries increased by 34.7%.

Other imported agricultural products also saw price hikes compared to February 2024. Raw cocoa, for instance, became 76.4% more expensive. Energy costs rose by 9.8%, with electricity imports experiencing a staggering increase of 111.7% and natural gas by 40.5%. Conversely, prices for mineral oil products, such as gasoline, decreased by 6.8%.

This trend of rising import prices reflects broader economic pressures, including supply chain disruptions and increased production costs worldwide. Consumers are likely to feel the pinch from these escalating prices, affecting their purchasing decisions and overall household budgets.