Page 42 - RusRPTJun21

Sugar prices were up 75% in 2020 and remain elevated in April. Other products like potatoes, carrots and eggs are also up in April by more than 30% in April y/y leading the government to try and introduce administrative controls to artificially hold price hikes down.
The spiking prices of things Russians buy everyday has unsettled consumers and lead to an expectation of unrealistically large price rises over the rest of the year.
The problem is starting to become political with Prime Minister Mikhail Mishustin recently blaming the “greed” of food retailers for the rise in prices – a popularist move to try and divert blame from the government.
The government, keen to be seen as doing something about inflation, has launched a number of initiatives targeting valuable products. Mishustin signed a decree last week implementing a floating tariff for sunflower oil exports that will go into effect on September 1 and run for nine months in an effort to keep the domestic market well supplied with cooking oil.
Sunflower seeds will also be subject to an export duty of 50%, but not less than $320 per tonne, effective from July 1. The export tariff for rapeseed (30%) has been extended to August 31.
Sugar has also come in for attention and restrictions on exports have already been tried, but the schemes are continuously being tinkered with as administrative controls typically bring on very temporary relief, but quickly lead to distortions that can make things worse. One effect is that food producers often hike the prices on non-regulated products to maintain profits, thus the controls can cause more widespread food inflation.
In the latest in the sugar saga, the Government is considering an intervention fund and has suggested duty free imports as price stabilisation measures for the sugar market for next season. Kommersant said that the Ministry of Economic Development does not see price caps being prolonged beyond June 1.
42 RUSSIA Country Report June 2021 www.intellinews.com