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HomeLatest NewsWill bread prices in Russia rise faster than inflation: expert forecast?

Will bread prices in Russia rise faster than inflation: expert forecast?

Date: September 29, 2023 Time: 10:37:26

In spring 2022, bakeries began receiving government subsidies for bread production.

Photo: Ivan MAKEEV

“Bread will rise in price!” – a popular Telegram channel recently shared its forecast. And this news has been actively discussed in recent weeks in the media. The Ministry of Agriculture, of course, immediately denied this information: it claims that there is no basis for it. And, in fact, grain prices have been falling all year and only in recent months have they started to rise. The Ministry of Agriculture is confident that the domestic market will be fully supplied with Russian cereals and baking flour. “The current gradual increase in cereal prices will not have a significant impact on the cost of bread and bakery products,” the department trusts. They admit that a price increase is possible, but that it will correspond to the level of inflation.

But it is enough to look at the Rosstat website to be convinced that, in fact, bread in Russia is becoming more and more expensive. They just don’t always make a splash. Thus, the price increase in January-July 2023 compared to the same period in 2022 amounted to 5.61%. And a year before it was even higher: 15.78%.

EVERYTHING AS ALWAYS

Should we expect further growth this year? Komsomolskaya Pravda asked this question to the president of the Russian Union of Enterprises of the Baking Industry, Alexei Lyalin.

– Let’s start with the fact that there is an annual indexation of prices for bakery products. It occurs within the limits of food inflation, which is usually higher than ordinary inflation. And it is not very clear why so much interest in this topic suddenly arose this year,” says the expert. – It is difficult to give exact figures on the adjustment of bread prices at the end of the year, because much will depend on the situation of other prices: those of cereals, packaging, fuel, etc. Furthermore, the situation is different in different regions. In some places, raw materials and supplies for production have already been purchased; For example, everything was delivered to the Arctic and other hard-to-reach regions several months in advance. There are good reserves in the southern regions of the country and in large cities, for example, Moscow and St. Petersburg. In this case, the price adjustment will be within the limits of inflation (the expected inflation in Russia for this year is 6%, this figure was recently announced by the Minister of Finance Anton Siluanov – Ed.) And there are regions where there are few own raw materials, where prices depend largely on the current prices of flour, fuel, etc. These are, for example, Tver, Veliky and Nizhny Novgorod, Vladimir; here prices can rise faster.

WHY CAN’T YOU AVOID PRICE INCREASES?

According to Alexey Lyalin, manufacturers are finding it increasingly difficult to maintain prices, because they are affected by rising transportation costs, employee salaries, as well as the cost of raw materials and packaging.

– You know how the price of fuel is growing this year (wholesale prices for diesel fuel, which agricultural producers use in their work, have increased by about 50% over the past two months – Ed.), so participation The percentage of delivery in the cost of bread has already reached 38%! – the specialist explains the situation. – In addition, there is a critical shortage of personnel in the sector. There is a particular shortage of drivers. People simply don’t come to work for us, because delivering bread always requires night shifts. And often – enormous distances. In Tyumen, our drivers travel 1000 km per shift! To retain people and attract new ones, you need to pay them well. And wage growth in some regions has already reached 50%. And in general all expenses are going up. Cars, for example, have already tripled in price in the last two years. And the price of one packaging unit immediately increased by one ruble, which is reflected in the retail price of bread.

Manufacturers are finding it increasingly difficult to maintain prices.

Photo: REUTERS

Furthermore, according to the expert, the baking industry consumes a lot of energy, but the bakers do not obtain any benefits:

– The national average price of electricity for our companies is 10 rubles/kW. In hard-to-reach regions, the price can reach up to 50 rubles per kilowatt, and in the Central Federal District the average is 7.3 kW/hour. Restaurants, for example, pay the same amount. But we produce a socially significant product!

In spring 2022, bakeries began to receive state subsidies for bread production in the amount of 2.5 rubles. per 1 kg (previously they were worth 2 rubles) – this measure was supposed to help producers maintain the prices of their products during difficult periods. The bakers asked the Ministry of Agriculture to triple payments to 7.5 rubles per kg. But in the middle of this year, according to Alexey Lyalin, the subsidies stopped being paid completely. The government explained this by lack of funds. Subsidies from the federal budget to the credit rate for the purchase of flour by flour producers were also canceled; now payments are maintained only in certain regions. No one yet knows when and if these programs will come back online.

“We need a federal program to support the baking industry,” Alexander Lyalin is sure. – Now it is poorly modernized, there are few modern companies. The profitability of our industry is very small, only 1.5%, even the best factories have a maximum of 9%. And compare this to the average trading margin, where it ranges from 30 to 110%!

BY THE WAY

What is “social bread”?

Many Russians barely feel the rise in prices, because for a few years now there has been something called social quality bread, the price of which has been kept at minimum levels. For example, a loaf of white bread weighing 350 grams can be bought in almost any supermarket for 17-20 rubles, and a loaf of black bread (650 grams) for 20-22 rubles. Despite the fact that the production cost of a kilo of bread has already exceeded 80 rubles.

“The expression “social bread” is not a term, but a slang concept,” explains expert Alexey Lyalin. – This is usually the name given to the most popular varieties of bread, usually two varieties: a loaf of rye and wheat bread and a loaf of wheat. But the minimum prices for this type of bread are maintained only by bakeries, which suffer losses in their production due to administrative pressure. And it was always necessary to redistribute the economic losses from the production of “social bread” to other types of products within the plant. But this could be tolerated as long as our people became richer and more actively bought various types of bread, as well as cakes, pastries, etc. But now the structure of consumption has changed, our citizens try not to buy unnecessary things, save on everything, as a result, the consumption of cheaper varieties is growing. And factories are forced to increase their production so that there is no shortage of social varieties. But this undermines the economics of companies.

“KP” educational program

TOP 5 unusual varieties of bread

the most rare

Injera bread is made with teff, a grain that only grows in Ethiopia. Ynjera looks like thick pita bread and is used as both food and utensil. Other dishes are placed on it, as on a plate, and their pieces are used as cutlery, collecting food with them.

The most controversial

The trend of eating insects continues to spread throughout the world. Cricket flour, rich in iron and protein, has become especially popular. For example, in Finland, the Fazer company produces bread from a mixture of regular and cricket flour. True, the proportion of insects in it is still small – only 3%. But the problems have begun.

the most sincere

Dedas Puri (translated from Georgian as “mother’s bread”) looks like an ordinary lavash made from yeast dough. But Georgian women bake it especially for their son or daughter before a long trip. And to be close to the child on the way, the mother, before sending the cake to the oven, leaves a print of her palm on it.

The most technologically advanced

Canned bread became known during World War II, but is still in demand. For example, B&M Baked Beans (USA) bakes its Boston Brown bread directly in tins. This bread is crustless, but retains its freshness and flavor for several years.

The most laborious

It takes 36 hours to prepare the popular German variety Pumpernickel from coarse rye flour with whole rye grains. The grains must rest in hot water, then bake at a temperature of 200°C and then “languish” for a whole day… Tired confectioners have invented a shorter cooking method, but it also takes between 12 and 16 hours.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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