Page 58 - RusRPTApr21

food in the consumer price basket is one third (excluding alcohol).
Price pressures on consumer food prices appear to remain, as producer prices in the food industry have continued to rise at an accelerated pace last autumn and were more than 14% higher in February than a year earlier. The rise in agricultural producer prices calmed down in January, but as a result of the sharp rise last autumn, prices were almost 20% higher in February than a year ago. In January-February, the annual increase in producer prices for crop production was as much as 32–33%.
According to a study by the Central Bank of Russia, price restrictions have led to various measures to control business in companies operating in the sectors directly covered by the restrictions and related to them, ie agriculture, industry, wholesale and retail trade, and exporters. Price increases have been refrained from in some companies, while there has been a partial transfer of price pressures from wholesale to retail. Estimates and plans have become more uncertain. There are plans to increase and partially reduce sown areas, and yield estimates have improved and partly decreased slightly due to perceived incentive risks. There has been a need in industry to reduce production. There are ideas in agriculture to switch to the production of other crops and in industry to increase the use of imported raw materials. In addition to the federal budget plan, public support for companies varies from regional and local budgets. The report concludes that estimates of business conditions have weakened and producers point to downside risks to profitability and weakened incentives,
58 RUSSIA Country Report April 2021 www.intellinews.com