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Freezing food prices will end in a scumbag


From January 1, retail prices for sunflower oil are planned to be frozen at 100 rubles per liter, and for sugar – 45 rubles per kilogram. The decision was caused by the fact that since August sunflower in Russia has risen in price by 35%, oil – by 20%. Active work on freezing is already underway – the regions are trying to negotiate with retailers and suppliers to keep prices at the specified level. In any case, this will be a temporary measure, since the costs of producers have grown significantly this year – this is the main reason for the rise in prices. Neither manufacturers nor retailers will be able to sell products at a loss, even if there are government-set prices. Most likely, each product group will have its own restrictive decision. Some of them have already been announced – in particular, the introduction of export duties on sunflower seeds from January 9, 2021. This year, due to drought in the south and partly in the center of Russia, the sunflower yield is significantly lower than last year (16.4 c / ha versus 18.3 c / ha). In addition, according to the Ministry of Agriculture, this season 1.2% less area (8.48 million hectares) has been allotted for sunflower than last year. This statistic was confirmed in a conversation with MK and Vasily Lopatin, chairman of peasant (farmer) enterprises and agricultural cooperatives of the Stavropol Territory: “We in the Stavropol Territory this year had a severe harvest failure: we collected almost one and a half times less than we usually collect. But if something of the food becomes more expensive, this does not mean that the peasant is to blame. We have nothing to do with pricing policy. At the same time, we have eternal problems due to the rise in prices for those circulating assets that we use in our production. Why doesn’t anyone talk about fuel? Diesel fuel rises in price regardless of whether oil prices are falling or growing. Our equipment is half, 60% depreciated, it is old. The park needs to be renewed, but we cannot. Our tractors have been working for 20-25 years. Well, we will patch them and drive them. ” According to our interlocutor, the state is accustomed to freezing prices on every occasion, but this is not an option. “If you are pursuing such an economic policy that the people do not have enough money for essential goods, including sugar and sunflower oil, then subsidize these goods. And if you make them artificially cheap, then you will ruin us peasants altogether, ”Lopatin said, addressing the authorities. It is worth noting that the Russian vegetable oils market has been a surplus market since 2012: in 2019, with a total domestic consumption of vegetable oils of 3.6 million tons, exports amounted to 4.4 million tons. At the same time, sunflower oil accounted for 70% of the export structure of vegetable oils. At the same time, according to industry experts, the vegetable oils market is export-oriented. And the price of sunflower oil on the domestic market directly depends on world prices. And now they are the highest in the last five years ($ 860 per ton). According to the general director of the ProZerno agency, Vladimir Petrichenko, a serious drop in sunflower yields at the main exporter of sunflower oil – in Ukraine, which, like our south, suffered from drought – is affecting. By the way, the outgoing year was a record for Russia in terms of sugar exports. In the season from October 2019 to the end of September 2020, our country exported almost 1.8 million tons of sugar, which brought it to the seventh place in world exports, judging by the data of the International Sugar Organization. And this despite the fact that earlier Russia was not at all among the top ten exporters. What caused the rise in the cost of butter and sugar? Part of the problem is expensive loans for farmers: a lower cost of loans could lower producers’ costs and slightly reduce the price level. “The higher the exchange rate of the dollar and the euro in Russia, the higher the prices will be – this is a key problem,” said Marina Strogaya, executive director of the Investment and Agrarian Fund. “Fixing prices will not fundamentally change the situation – they will continue to grow anyway and they will be released in three months.” Of course, there is a speculative component in pricing, but it is difficult to assess it. The marginality of agricultural production is relatively low (about 3-5%), and manufacturers do not wind much on their products. And retail basically makes a markup on basic food products at the level of 5% of the purchase price. “In turn, along with the speculative component, the price growth was influenced by inflation, which accelerated to 4.4%, as well as the weakening of the ruble and the growth of exchange prices for sugar. This has led to the fact that it has become more profitable to export the product, respectively, the prices within the country began to catch up with the world prices, “- said leading analyst at Forex Optimum Ivan Kapustyansky. The Ministry of Agriculture has the following tool in its arsenal: to promptly limit export quotas so that they do not export more than what is required and so that a lot of product, even in excess, would remain in the country. recalled the chief analyst of “TeleTrade” Pyotr Pushkarev. “You cannot sell too much at a high price inside Russia now, the goods remain on the shelves. So only a real surplus of supply in the end makes prices creep down, and only decrees and directives cannot keep the price tags at a certain level, ”he noted. In turn, the Ministry of Economic Development proposed to regulate prices for all products with an increase of 10%. Now it is possible to limit the growth in cost when the price of the goods rises by 30% or more per month. “This is an extremely strange proposal, which shows the unprofessionalism of the people who voiced it,” says Andrey Karpov, Chairman of the Board of the Russian Association of Retail Market Experts. – Over time, the initiators may hear a flurry of accusations against them. It will be difficult for them to justify why they do not take any measures for every 10% increase in prices in a particular store. ” The problem of rising prices for basic food products is becoming not so much economic as political, because it concerns all Russians, says Maxim Petunin, director of the Institute for Social Research and Development of Civil Initiatives. “The questions of specific agreements with market participants and the possible timing of the implementation of President Putin’s order remain open,” the expert says. – If the price is not fixed at a level that is profitable for producers, then a shortage of products is quite possible. Moreover, today it is not clear how the state will control prices in retail and retail outlets. ” Andrei Karpov, for his part, believes that either subsidies to producers or material assistance to Russians who do not have enough money for food could solve the problem with prices. “The main problem is not that the agrarians began to earn money on the sale of their goods, but that the incomes of Russians do not allow them to buy these products. The assortment is large, but not every consumer has money. We must fight not with wealth, but with poverty, ”the expert summed up. Read the article “Putin, the sunflower knight: why food prices will obey”


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