Rosstat published data on the growth of food prices in April. The results are striking: a rise in the cost of food not seen since the crisis of 2008. Lemons became more expensive by 2.5 times, onion — by almost 50%, garlic 25%… the Objective factors that led to the rise of prices is seasonality, the fall of the ruble, and finally rupture of the supply chain on the background of the pandemic across the country, forcing suppliers to spend more money on fuel and to rebuild the routes of delivery as the warehouse stocks are not limitless. But, according to experts, there is also a speculative component — manufacturers do not lose the opportunity to cash in on the impoverished Russians, who continue to believe that the consumption of lemon and garlic can save you from a coronavirus.
food inflation in Russia in April month-on-month terms, amounted to 1.7% after the March of 0.96%, according to Rosstat. Growth in food prices was caused by the simultaneous impact of a number of negative factors, including: reduction of supply due to pandemic, the growth rate of foreign currency, pre-emptive demand and desire of suppliers and retailers to make money, says leading analyst of the Forex Optimum Ivan kapustyasky. “Now the situation is corrected. The ruble has stabilized in the area of 73.5 per dollar. Many countries started a gradual exit from isolation, the expert notes. — However, the full return of food prices to the level of the beginning of the crisis should not be expected. This applies primarily to imported goods. Still, from the beginning of year the ruble significantly fell: the dollar has appreciated by more than 17%”.
Experts believe that the lemons have risen in price just because of the growth of the dollar, and also due to the reduction of supplies from abroad amid restrictions on cross-border movements. But the Federal anti-monopoly service, however, tests the ability of a cartel between suppliers of goods. It is expected that in the second half of may, the price of lemons in retail will decline.
“In a situation of rising prices is visible not so much a cartel as the desire of manufacturers and retailers to compensate for the losses in other positions due to the product that enjoys the greatest demand,” — says the expert of the Academy of management Finance and investments Aleksey Krichevskiy.
the price of onions grow in April and may, traditionally in this period over last year’s stocks of domestic products, and on the shelves of goods from abroad. In 2020, the bow goes up and because of the growth of the dollar. The same applies to garlic – now in stores comes products from abroad, as the domestic harvest last year ended. According to the forecasts of market experts, to Jun prices on onions and garlic will continue to grow.
Executive ��Director JSC “Investment and Agricultural Fund” Marina Strict is convinced that the abnormal rise in prices of some food products is not due to seasonal factors and speculative increase in demand. “In the last two months alternately increased demand for various products, which, according to many citizens, helps strengthen immunity and combat the threat of viral infection. Now came the turn of the lemons, onions and garlic, — said the expert. In March soared the price of ginger. The cost reduction will happen, but only in June-July, when the hyped demand will subside and the market will be the products of domestic producers”.
Alex Krichevsky, in turn, stressed that agriculture, like all production in the country, has been put on pause, so in the fall you can expect a similar price with the current or even slightly higher, despite the seasonality of production. “This will lead to a drop in demand and even greater failure in the financial reports of agricultural producers, which will lead to credit defaults,” he said.
the View that the food will continue to grow, despite falling incomes of Russian consumers, is echoed by other interlocutors “MK”. “The price of milk, eggs, meat, flour, pasta, canned meat, tea and coffee will continue to grow, as suppliers increase selling prices (on average by 5-25%), which is associated with the growth of the dollar. The import component is in almost every food product, which affects the final cost,” says first Vice-President of “OPORA Russia” Paul Segal.
Maybe from the business point of view it’s a logical story to raise the price of something you buy often: and from food-the consumer just will not give up. But for the vast majority of the population, such a perspective is confusing, because a huge number of people have lost their jobs and left without means of subsistence.
Top 8 most expensive products in April 2020
Lemons 250%
Onion 49,9%
Garlic 25,7%
Carrot 17,1%
Potatoes 16%
Beets are 10.7%
Apples to 8.8%
Oranges and 8.4%
Source: Rosstat
