The Russian government decided to extend the agreements on stabilizing prices for granulated sugar until June 1, 2021, and for sunflower oil - until October 1.
This resolution was approved by the Prime Minister of the country Mikhail Mishustin.
“We are talking about special agreements that the Ministry of Agriculture and the Ministry of Industry and Trade conclude with industry associations, as well as with manufacturers of goods, suppliers and retail chains.
They fix the cost of one kilogram of sugar at a level not higher than 36 rubles for wholesalers and 46 rubles for retail buyers, one liter of oil - at 95 and 110 rubles, respectively, ”the Cabinet of Ministers said.
Initially, the agreements expired on April 1, which could lead to a rise in the price of products, according to the government.
As noted in the Cabinet of Ministers, the decision to prolong the contracts is included in a set of measures to reduce food prices.
The corresponding list of initiatives was previously developed by the authorities on behalf of President Vladimir Putin.
"The government is taking all actions in pursuance of the relevant instructions of the head of state in such a way that this does not lead to any commodity distortions in the entire product and product chain - both from the point of view of manufacturers and from the point of view of retailers," the press commented on the decision of the Cabinet of Ministers. Presidential Secretary Dmitry Peskov.
Recall that the growth of consumer prices in Russia accelerated in the second half of 2020.
So, according to Rosstat, in November, inflation in the country exceeded the target level of the Central Bank (4%) and reached 4.4%, and in December it grew to 4.9% - the highest level since May 2019.
At the same time, the rate of rise in prices for some products was several times higher than the inflation rate.
For example, in 2020, sugar rose in price by almost 65%, sunflower oil - by 26%, cereals - by 20%, fruits and vegetables - by 17%, and pasta - by 12%.
Against this backdrop, in December, Vladimir Putin criticized the government for rising food prices and demanded that measures be taken to resolve the problem.
As a result, the Cabinet of Ministers promptly prepared a number of initiatives.
In addition to signing agreements on stabilizing prices for sugar and sunflower oil, duties on a number of agricultural products were adjusted and tools were created to support millers and bakers.
At the same time, the authorities have developed a bill that allows the government to introduce price regulation under certain conditions.
In addition, in March 2021, the Cabinet of Ministers introduced constant monitoring of prices for consumer goods and services.
As planned by the government, the initiative will make it possible to promptly respond to a sharp rise in prices for products that are significant for Russians and promptly take stabilizing measures.
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© Sergey Pyatakov
In many ways, the government's decision to extend the agreements on sugar and sunflower oil is associated with a noticeable rise in the price of food in the world.
This was announced on March 25 during a press conference by the head of the Ministry of Economic Development Maxim Reshetnikov.
Note that in February 2021, against the backdrop of the coronavirus pandemic, world food prices reached their highest level in almost seven years.
According to the Food and Agriculture Organization of the United Nations (FAO), the corresponding index for the first time since July 2014 reached 116 points.
As the FAO specialists emphasized, one of the main reasons for the growth in the indicator was a significant increase in the cost of sugar and vegetable oils.
This state of affairs on world trading floors also leads to higher prices for products within Russia, according to the Ministry of Economic Development.
“Initially, our desire was, of all departments, to get out of the system of agreements, to get out of the system of administrative regulation, and we all strove for this.
But in the past two weeks, we have seen the risks of a significant jump in prices if the agreements were withdrawn.
And we realized that additional measures were needed, ”explained Maxim Reshetnikov.
Cash support
According to Reshetnikov, along with the extension of the agreements, the authorities will begin to provide subsidies to sugar producers when supplying products to retail chains.
According to experts interviewed by RT, such a solution will minimize the losses of companies from freezing prices.
“When prices are fixed, producers lose part of their profits, so it becomes more and more difficult for them to comply with the terms of agreements.
Now the government will compensate part of the costs.
As a result, the extension of the agreements, together with subsidies, will probably allow citizens to buy goods at a fixed cost, and producers - to maintain profitability, ”explained Artyom Deev, head of the analytical department at AMarkets to RT.
According to Georgy Ostapkovich, Director of the Center for Market Research at the Institute for Statistical Studies and Economics of Knowledge at the Higher School of Economics, it will be possible to adjust prices manually without significant losses for the market within six months.
After that, industry participants will be able to act on their own without the direct involvement of the authorities, as the impact of the coronavirus pandemic on prices will decrease.
“At the same time, closer to autumn there will be a new harvest of sugar beets and sunflowers, which will become an additional factor for stabilizing prices for these goods.
In general, by the end of 2021, the cost of food should increase within the framework of food inflation, which is 6.5-7%, ”concluded Ostapkovich.