Rising prices due to food embargo

grocery embargo

28 of August. Permanent monitoring of prices for food products in Russia shows that products are getting more expensive. This is due to the fact that foreign suppliers that do not fall under "food embargo", increase selling prices for their goods, expecting growth of exports to Russia. So, the Brazilian meat suppliers increased the price of chicken legs is almost twice the price of pork increased by almost 20%. Belarus increased the selling price of chicken meat by almost 10%.

According to experts, the situation may correct the increase in domestic meat production. At the same time, experts recognize that overnight run sufficient production capacity will not succeed. Accordingly, at some time in the country will increase the growth of prices for food products. This will affect not only consumers but also the meat processors, because the demand for their products will decline.

Sergey Yushin (the head of Executive Committee of National meat Association) notes that since the announcement of the food embargo, export prices of poultry and pork in Brazil (which is the only serious alternative supplier of meat to Russia) has increased dramatically – pork rose in price on average by 20-25%, chicken legs went up by an average of 1.4 up to 2-2,2 dollars per kilogram, pork has risen by about 50-150%. After Brazilian suppliers to earn money on the Russian embargo decided and their Belarusian colleagues. The price of poultry in recent days the Belarusian suppliers increased by 8-10%.

Yushin noted that to reduce the dependence of Russia from foreign suppliers, it is necessary to increase meat production in the country. "Last year imports of pork and processed products amounted to 1 million tons. Experts estimate in the next 5-6 years it is necessary to enter an order of 700 thousand tons of domestic capacity to at least partially block the import. Moreover, it is necessary to build a new modern pig farms, as the modernization of old ones will not increase".

The increase in meat production within the country will increase the supply of pork on the market that will help to reduce prices – said the expert. In addition, the production of chicken meat should also increase, since all meats are interchangeable and consumers are seeing an increase in the price of pork, go for chicken.

Elena Tyurina (the General Director of Institute of agrarian marketing) believes that the rising price of meat from Brazil will inevitably increase the price of meat on the shelves of Russian stores. "To restrain prices is unlikely, so as to increase rapidly the local production is impossible, so without the import of meat just will not do. This year Russia is forced to import about 300-350 thousand tons. To avoid pressure by foreign suppliers can be due to the lower contract volumes, average purchase, not a large party, filling gradually the Russian market". The price increase on the sausage, will lead to falling of demand for it, and this, in turn, will lead to the fact that manufacturers will not be able to implement their goods. And the prices will inevitably grow, because the manufacturers of meat products use imported raw materials, the price of which has grown. Incomes of Russians practically do not grow, and prices are constantly increasing. According to Tyurina, the government is unlikely to subsidize the production of sausage products, since the volume of state support to agro-industry, and so it is planned at a high level.

According to statistics, Russians often complain about the rising prices of meat products. In particular from 15 to 25 August, the FAS Russia received some 570 complaints about the price growth in this industrial segment.

The situation in the meat market may soon start to affect the fruit and vegetable market. Turkey, for example, plans to increase exports of fruits and vegetables to Russia, has already started to raise prices within its own country. During the year, the vegetables and fruit rose by 50% due to dry weather. Experts are worried about the introduction of quotas for export that will inevitably lead to higher prices for all foreign buyers, including for Russia.

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