Next May 1 will mark a turning point in the European agri-food market. The provisional entry into force of the trade agreement between the European Union and Mercosura bloc made up of Argentina, Brazil, Uruguay and Paraguay, will allow the progressive reduction of tariffs on agricultural products, including fruits and vegetables, which could translate into a drop in prices for Spanish consumers in the coming months. “Today we take an important step to demonstrate our credibility as a key trading partner,” said European Trade Commissioner Maros Sefcovic when announcing the measure.
This is explained because the elimination or reduction of tariff barriers makes it cheaper to import products from South America, increases competition in supermarkets and puts downward pressure on final prices. The agreement establishes that tariffs below 5% will disappear immediately, those between 5.1% and 10% will be eliminated within four years, and those above 10.1% will be eliminated over a period of up to seven years. In practice, this will allow products such as melons, watermelons, papayas or certain citrus fruits, already present in the European market, to reach supermarkets with zero tariffs or with significantly reduced rates.
According to first estimates, the impact will be uneven and gradual, depending on the product and the adaptation capacity of the distribution chain, although some foods could reflect reductions in the short term.
The shopping basket continues to become more expensive
This measure comes at a time of strong tension in food prices. In recent months, the shopping basket has continued to become more expensive, with notable increases in fruits and vegetables close to 6% in some cases, driven by the increase in energy costslogistics and production.
And the trend is not something specific. Consumer organizations warn that fruits and vegetables have risen up to 18% in the last year and that prices have been increasing since 2022.
Various factors lie behind this structural increase. The agricultural sector takes time warning of rising costsfrom fertilizers to labourwhich are inevitably transferred to the final price. Added to this is the impact of climate change on harvests and demanding European regulations that, according to producers, raise standards but also costs compared to foreign competitors.
An agreement with benefits and concern in the European field
In this way, the agreement with Mercosur can help lower prices, although it is not without controversy. On the one hand, Brussels has included protection measures and environmental demands to take care of both European farmers and the environment. On the other hand, the Spanish countryside fears that the entry of cheaper products will increase competition in an already very pressured market.
The debate is not new. Farmers have been denouncing for years what they consider unfair competition, since in other countries It is produced with lower costs and different standards. The European Commission, however, ensures that imported products must comply with EU health standards and that there are limits and controls to avoid problems on the market.
In the medium term, it is unclear how much prices will fall. It will depend on factors such as energy costdemand, climate or if supermarkets really pass on these drops to the consumer. Furthermore, food prices tend to change a lot and depend on both global and local factors.
Therefore, the possible decline since May should be taken with caution. It will not be an immediate change, but a gradual one. The agreement may help contain prices, but it does not by itself solve the underlying problems of the food system.