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Monday, March 19, 2018

“Bread will go up, despite the fact that wheat only cheaper”

We used that bread maker, because it is so important, how much will the product have on the tables is all the Russians. Will a loaf of bread to decrease in proportion to the movement of grain prices, which only last week fell by 50-80 rubles per ton. The President of the Russian grain Union Arkady Zlochevsky is sure to expect that the price tag on the finished baked goods will behave exactly the same, not worth it. Moreover, the prices of bread and grain is virtually nonexistent. The share price of grain in the cost of bread is less than 20%. Therefore, most likely, bakery waiting for another rise. According to respondents, the newspaper’s experts, by the end of the year margin may not be less than 11%.

photo: Gennady Cherkasov

According to Arkady Zlochevsky, the minimum price for wheat of the third grade today is 10 430 rubles per ton. While the peak of the grain prices at the level of 11 500 rubles per ton was at the rate of 32 rubles per dollar — that is, six or seven years ago. This trend is global in nature. In the U.S., for example, wheat is trading at 164$ per tonne, the worst since 2010. “All the trends of the weakening of prices is obvious. This has a negative impact on export sales and domestic situation from the point of view of stimulation of crops”, — said Zlochevsky, adding that significant strengthening prices do not have to wait. This “promotes” the General state of the economy, rising grain stocks and falling oil prices, which affects all commodities.

He recalled that still continues to act imposed a year ago to stabilize the situation on the domestic grain market, the export duty for zeroing confronting Grain Union. “The direct effects of duties on domestic purchases of farmers is quite low. Much more loss brings the duty created risks, which lead to the decrease in the activity of export. We have nowhere to put resources, it significantly reduces the prices,” — said Zlochevsky. At the same time, the current level of pricing in a very dynamic increase in costs leads to reduced sown area under wheat and simultaneously multiply fields with soybeans and corn that are not subject to duty. In the spring will be planted 52 million hectares, of which 31 million have to take a grain (it’s 98% from last year), the acreage of corn will increase to 3 million hectares under soybean — to 2.2 million hectares.

“Hope that the bread will fall in price, it is pointless. Even against the background of falling grain. This was never in the recent history of Russia”, — said the head of the Russian Guild of bakers and confectioners Yury Katsnelson. Last year, the bakery has risen to the level of inflation, that is about 13%. This year, according to Katznelson, a situation likely to be repeated. The interlocutor of “MK” expects that by the end of the year, bread will become more expensive by at least 11%. Maybe more, given the increase in excise taxes on gasoline, which is scheduled for the coming April.

The only mechanism that, according to Yury Katsnelson, could really affect the price of bread, is a return to the production and sale of bread through a small private bakeries and bakeries. This scheme existed in our country until 1917, in Moscow alone there were about 800 bakeries. “Only this way a competitive market and it will be possible to go from huge trade margins of retailers, which is now in the cost of bread is about 35%”, — the expert believes.


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