Organic food is more price-stable than conventional products when it comes to inflation - this analysis shows why

Organic food is more price-stable than conventional products when it comes to inflation - this analysis shows why

According to a report from www.businessinsider.de, an evaluation by the German Economic Institute shows that the prices of many regional organic foods rose less sharply during the wave of inflation than the prices for conventional products. This is due, among other things, to the fact that fewer fertilizers and pesticides are used in the production of organic products and the transport routes are shorter. As a result, the price difference between organic and conventional products has narrowed, which could help organic products out of the niche.

The trend towards organic food continues, but the market share is still at seven percent, as organic food is generally more expensive than conventional products. During the wave of inflation, however, the prices of many organic foods rose less than the prices for food as a whole. This is due to the lower use of fertilizers and pesticides as well as the shorter transport routes for organic products. During the Corona pandemic, the demand for organic products temporarily increased, but with the onset of inflation, sales for organic products also fell.

The IW compared prices in the first quarter of 2022 with the second quarter of 2023 and found that prices for many conventional products rose more than the prices for organic products. The price difference between the two types of products has therefore decreased. However, organic food is still more expensive, even if the gap has narrowed. However, there are exceptions, such as rapeseed oil, where the organic product is even cheaper than the conventional product.

Organic farming has its price due to species-appropriate animal husbandry, environmentally friendly cultivation methods and operational controls. Nevertheless, regional value chains make organic farms more independent of current crises and ensure more stable prices.

This development could have an impact on the market and the financial industry. The smaller price difference between organic and conventional products could encourage more consumers to choose organic, which could lead to further growth in the organic market. This could also lead to companies investing more in organic farming and developing sustainable business models. In addition, regional value chains and resource-saving cycles in organic farming could help stabilize prices and reduce the industry's vulnerability to price increases.

Overall, it can be said that the more stable prices and the smaller price difference between organic and conventional foods can potentially help the organic market to develop further and gain greater attention. Investing in organic farming and sustainable business models could also open up new opportunities for companies.

Source: According to a report from www.businessinsider.de