Electricity and air conditioning sales profit from dog days

As such, sales by electricity distributors and home appliances retailers are likely to rise.  However, heat and drought could lead to serious losses for agriculture, with farmers eventually increasing foodstuff prices.

Power distributor Electrica estimates a one percent increase in sales for domestic use, exceeding €1 million. Producers of electricity based on other sources than water could also see an increase in their businesses, as these will produce more to compensate the deficit of hydro power plants. Draught had led to significantly lower levels of rivers and dam waters.

Household appliance retailers and distributors also expect to increase their sales, as they forecast purchases of air conditioners to almost double this summer, up to €35 million, from an average €17 million.

Food and beverage producers are also expecting profits as a result of the heat. Mineral water producer sales are usually 50 percent higher in May-August, compared to the rest of the year. This May, sales were some €15 million higher than in April. Ice cream sales double during the summer, and beer producers expect an increase in sales by 30 percent at this time of year, based on May-June sales, which were some €50 million higher than in January-April.

The tourism business also flourishes in summer, with travel agencies selling up to 300 percent more holiday packages in the summer season than throughout the year.

Gas distributors and retailers are likewise expecting higher profits, with many Romanians traveling on holiday by car. The number of cars used to reach local and foreign holiday destinations increases by 60-80 percent in summer.

Losers. Although heat and draught mean profits for many businesses, they yield serious losses for other important economic segments. Agriculture stands to lose more than €400 million this year, because of low grain production. However, grain distributors could make hundreds of millions of euros from imports at higher prices. Small farms are also hit by drought and their crops are severely affected.  Because there are less fruits and vegetables on the market, there is less competition and prices will likely rise.

Price increase

The cost of electricity could also rise by the end of the year, as hydro power plants will have a lower production due to the drought. And last but not least, consumers are also likely to experience losses in their budgets, with several everyday products costing more this summer.