Inflation

Russian Inflation Jumps to 8.1%

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Inflation in Russia climbed to its highest level in almost six years in October as the government and Central Bank struggle to rein in rapid price rises which threaten to undermine economic recovery.

Inflation hit 8.1% last month, the Rosstat national statistics service said Wednesday — the fastest rate of price increases since February 2016, and more than double the Central Bank’s 4% target. That was up from a reading of 7.4% a month earlier and ahead of market expectations.

The higher prices come as policymakers around the world face the prospect of so-called “stagflation” — high inflation and sluggish growth — as the global economy continues to emerge from the coronavirus. In the U.S., inflation is currently running at a 13-year high amid major supply chain bottlenecks.

Russia’s Central Bank chief Elvira Nabiullina has for months sounded the alarm over global price rises, putting herself at odds with western policymakers earlier this year by warning them the uptick in inflation was not just a transitory phenomenon.

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Rosstat Reports Sharp Rise of Fruit and Veg Prices in Russia

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Rosstat reports that over the past month, lemon prices in Russia have become 2.5 times higher. According to experts, this was due to rumors that the fruit supposedly helped protect you against the coronavirus. Other fruits and vegetables also recorded significant increases in April.

Statistics show, in that month, the price of onions rose by 49.9%; garlic became 25.7% more expensive; the cost of cabbage and carrots increased by 17.1%; potatoes saw their price rise by 16%, and that of beets by 10.7%. Apples went up by 8.8% and oranges, by 8.4%. At the same time, the cost of cucumbers fell by 20.6%, and that of tomatoes, by 10.3%.

Experts believe that the increase in fruit and vegetable prices is clearly linked to an increase in the cost of products in general.

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Prices Change of Fruits and Vegetables in Russia in 2018-2019

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The research of changes in prices for fruits and vegetables was carried out by analysts of the AGRO24 trading platform based on the prices of four online stores in Moscow: Utkonos, VkusVill, Perekrestok and Metro Cash & Carry.

The average retail prices for pears increased by 13%: it cost 165 rubles last year, and now it costs 188 rubles per kilogram. Bananas also scored in price: these farmers can now be bought for 76 rubles, and in June 2018 it cost 61 rubles. Oranges have decreased in price by 15–20%: the price value of last year was 113 rubles, now it is 93 rubles. Apples, like oranges, have fallen in price: they can now be purchased at a price of 121 rubles, and in 2018 – 140 rubles.

The price of cabbage has increased in the range from 40% to 60%. This year it can be purchased at an average price of 62 rubles, and in the past – 30 rubles each. This is the biggest price increase in our research.

The price of cucumbers increased by 16% compared to the same period last year. In June last year, the price was 118 rubles, now cucumbers cost 137 rubles per kilogram.

There is a strong jump in the price of potatoes this year compared with the past. The average retail price gained 40% per year. In 2018, potatoes could be bought at a price of 43 rubles, now it will cost 61 rubles.

Tomatoes also rose in price compared to June 2018: last year they cost 272 rubles, in this – 286 rubles. The price of tomatoes increased by 5–15%.

Onions, like cabbage, have greatly increased in price compared to the same period last year: prices have increased by 56%. Onions cost 39 rubles, now it costs 61 rubles. Prices for beets, compared with other vegetables, decreased by 15–20%. The main product of the “borsch set” in 2018 could be purchased at a price of 69 rubles, in 2019 – 45 rubles. The price for carrots also decreased by 10–20%. Last June, carrots cost 68 rubles, this year – 55 rubles per kilogram.

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Fruit and Veg Prices Rising Much Faster in Russia Than in the EU

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Between January and May 2018, food products became 2.1% more expensive in Russia, while in the European Union, the same products saw prices grow by just 1.1%, according to the Federal Statistics Service (Rosstat).

The most notable difference was recorded in the price of vegetables, which grew by 14.4% in Russia, while in the EU they only increased by 2.7%. Meanwhile, fruit prices rose by 9.3%, while in the EU, they only increased by 6.7%.

It is worth noting that in 2017, the picture was the reverse, with prices in Russia rising more slowly than in the EU. Last year, food prices in Russia grew by 0.7%, while in the EU they increased by 2.6%.

www.freshplaza.com

Inflation Rate Growing Because of Atypically Cold Weather

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In Russia, cold weather in spring and summer can cause the decrease of harvest, which may lead to the growth of consumer prices at the end of this year and even in the first half of 2018, according to new study by the Central Bank, published on July 12.

According to the Central Bank, in June inflation rate was 4.4% in annual terms (before that the inflation rate was expected to be 4%). The growth of inflation in the first summer month was affected by prices for fruits and vegetables, which increased by 8.3% compared to May and by 27.6% from the beginning of 2017. From April to June, price for potatoes went up by 91.9%, and price for staple vegetables except for cucumbers and tomatoes rose by 67.2%, according to the data of the Ministry of Economic Development.

Earlier it was said, that the rise in prices for fruits and vegetables was attributed to the delays of the early harvest because of atypically cold weather in spring and summer. According to meteorologists, May was one of the coldest in the history of the country. However, the Central Bank believes that the spring-summer inflation is temporary.

Beside the cold weather, the inflation rate was also affected by the weakening of the ruble, experts say.

The official authorities expect a slowdown in the growth of consumer prices, including fruits and vegetables. Maxim Oreshkin, head of the Ministry of Economic Development, predicts a decline in prices for vegetables in July-August, after the arrival of a new crop on the market. According to the minister, inflation in 2017 will be 3.8%.

www.russian.rt.com

 

Product assortment and supply of imported fruits and vegetables are reducing in Russia

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Because of the instability of exchange markets and ruble devaluation, suppliers are forced to review the assortment every day and reduce supplies of vegetables and fruits from other countries.

Last week the assortment of fruits and vegetables decreased by 20% on average. Suppliers are ready to stop importing a number of niche vegetables such as cherry tomatoes, zucchini, radishes and some kinds of cabbage.

Situation with fruits is a little better. Citrus, bananas, apples and exotic fruits remain the main fruit imports, as on the eve of New Year holidays, this product is in high demand. However, the geography of deliveries changed. Now Russian importers mainly supply relatively cheap citrus from Turkey, while a month ago the main supplier of citrus was Morocco.

www.freshmarket.ru

Russians may spend up to 40% of the expenses on food

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Russians are currently spending about 36 percent of all the expenses on food, but many specialists forecast that this number will grow up to 40 percent. The Russians have started saving and changing their shopping preferences to discount and convenience stores.

According to the study “Russian Food Retail: Current Situation and Prospects”, conducted by VTB Capital, the number 40 percent is significantly higher than the highest figure in European countries. For example, in Germany, the UK and Italy it is about 12-13 percent, in Poland and Turkey it is about 23 percent.

According to the same study, imported food products amount to about 20 percent. As for the fruits the number is about 40 percent, for vegetables it is less – 25 percent.

“One in four consumers now shops at discount and convenience stores,” Ilona Lepp, director of work with retail chains of Nielsen Eastern Europe.

At the same time, the increase in revenue of Dixy retail network (mostly convenience stores) is 29.5 percent in October. During the first 10 months of the year, the increase in revenue was 25.8 percent. The similar situation is with the Russian retail network Magnit – the increase in revenues is a 36.14 percent increase in October, and 30.66 percent increase for the first 10 months of the year. Retail representatives said that they did not noticed consumption decrease.

In July, food inflation in Russia was recorded at 11.4 percent, according to Russia’s Federal State Statistics Service and confirmed by Infoline-Analytics.

www.fruitnews.info

Since January consumer prices in Russia have grown 5 times more compared to Europe

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For the first half of this year, consumer prices in Russia have grown by 4.5%. On the average, in the EU consumer prices have increased by 0.9% for the same period.

In the U.S., Canada and Turkey, consumer prices have grown by 2%, in the Republic of Korea by 0.7%, and in Norway the deflation rate was 0.4%. The only country, where the inflation rate was higher than in Russia is Belarus, the inflation rate there  is 12% for the period.

According to the Federal State Statistics Service of Russian Federation, the inflation rate of the food segment was one of the highest of all the other sectors in Russia: food prices rose by 5.9% in Russia, in the EU – by 1.6%.

And although price growth for vegetables decreased more than twice, it was still quite high – 8%.

Prices for fruits in Russia fell by 2% in August, in the EU decline in prices for the same period was 3.5%.

Source: www.fruitnews.ru

Russian Retail Sales Slow To 18-Month Low As Inflation Bites

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Russian retail sales grew in July at the weakest pace in 18 months after faster inflation curbed consumer purchasing power, threatening to undercut a mainstay of the country’s economic growth this year.

Receipts at merchants rose 5.1 percent from a year earlier, slowing from June’s 6.9 percent to the weakest pace since January 2011, the Federal Statistics Service in Moscow said in an e-mailed statement today. That missed all 15 estimates in a Bloomberg survey, which forecast 6.2 percent growth.

Russian real wages grew 10.2 percent in July from a year earlier, the service said. That matched the downwardly revised figure for a month earlier and missed economist forecast for 11.2 percent growth. Retail sales from a month earlier advanced 1.6 percent, also missing the median estimate of 2.6 percent.

“The softening in retail sales was to a large extent concentrated in food sales, likely a consequence of rising food inflation,” Vladimir Kolychev, head of research at Societe Generale SA’s OAO Rosbank (ROSB) unit in Moscow, said by e-mail. The expansion in non-food categories was “still robust” at 8.6 percent, he said.

Unemployment remained at 5.4 percent for a third month, the lowest level since at least 1999. Economists had forecast an increase to 5.5 percent, according to the median of 11 estimates in a Bloomberg survey.

“The steady unemployment rate is the only bright spot in the data, generally suggesting that domestic demand is clearly losing steam,” Dmitry Polevoy, chief economist at ING Groep NV in Moscow, said in a note. “With food inflation clearly accelerating, real wage growth easing and retail lending also losing steam, both food and non-food retail sales are set to weaken further in the second half.”

Source: www.bloomberg.com

Price growth of fruits and vegetables in Russia: the prices have never grown so fast

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According to the Federal State Statistics Service, only during 1st and 2nd of July, the inflation rate grew up by 0.5%: the residential rate fee went up by 6.2%, electricity fee – by 4.7%, water and heating fees – by 2.4% and 3.2% respectively. Surface transportation fee went up by 4%. Vodka prices grew by 1.7%, chicken and sugar prices – by 0.7% and 0.5% respectively, according to the report of NEWSru.com with reference to newspaper Vedomosti.

But in June the inflation rate began to rise faster. As the Federal State Statistics Service reported, in June 2012 the price increase rate was 0.9% compared to 0.2% in June 2011. The reason of high rate of the inflation in June was the price growth of fruits and vegetables, as Oleg Zasov, director of the Department of Economic Development, explains. In general, food prices grew by 1.6% in June, but if fruit and vegetables were not taken into consideration, the food inflation was only 0.3%, according to the Federal State Statistics Service.

Prices for vegetables and fruits grew by 13.4% compared to May prices and they went up by 28.8% since the beginning of the year: in June the onion price grew by 39.6%, cabbage price – by 28.6%, potato price – by 24.4%, carrot price – by 21.9%, beet price – by 18.3%.  Lemon price grew by 20.0%, and grapes, pear and orange prices – by  6.3-9.8%.

Andrej Belousov, minister of the Department of Economic Development, called the price rise of fruit and vegetables abnormal. The prices for fruit and vegetables have never grown so fast, and one of the reasons is that the prices for the last year harvest were quite low, meanwhile the stock came to an end in May, and the prices began to rise.

Another reason of the price growth is the drought in Russia’s south regions in May: the harvest of vegetables, especially cabbage, was less than it had been expected before, as Dmitry Rylko, CEO of the Institute of Agricultural Market Studies, told, but he also said that the situation is going to return to its usual state in the nearest future. Dmitry Rylko and Andrej Belousov believe that in July price growth of vegetables and fruit is going to slow down, and then, in August and September, prices may decline.

But while there is no domestic harvest, the import rate is quite high, and it went up because of the depreciation of the ruble, as Evgenij Gavrilenkov, Troika Dialog chief economist, said. According to the Federal State Statistics Service, the general inflation rate grew by 3.8% since the beginning of the year.

Source: www.fruitnews.ru