NATALIA SHAGAIDA: “GROCERY PRICES SEE A RECORD-BREAKING SPIKE”

In Russia, foodstuff prices are soaring at breakneck speed. Prices for cabbage and carrots increased, while those of bananas have hit their all-time high. Natalya Shagaida, Head of the Gaidar Institute’s Agrarian Department, said in her interview with 360 that the reasons for the current spike in prices should be looked for outside of the agricultural sector. The underlying contributing factors include the rise in prices for imported vegetable seeds, spare parts for equipment, and the ever-increasing shipping costs.

In Russia over the course of July, prices for other food staples notably climbed. According to Rosstat, those for cabbage and carrots gained 4.2% and 1.9% respectively. In no time, prices for apples followed suit and also went up. The prices of canned meat-based baby meals, full fat cottage cheese, and pork similarly exhibited an upward trend.

Natalya Shagaida pointed out the factors that affected the cost of bananas. In her opinion, the ruble forex rate, the number of suppliers, and the seller markup distribution methods have all played their role in shaping the current banana price pattern on the retail market. Sellers increase their mark-ups on low-value goods, and minimizes those on socially important goods.

“Banana is the cheapest fruit. Its price can rise to catch up with the upward movement of other goods, as a result of the distribution of seller markups,” the expert explained.

Special attention should also be paid to other factors: the rising prices of gasoline and natural gas, the spike in transportation costs, and trade restrictions.

“If the factors of production do not become more expensive, and there are no trade restrictions, then there is no reason to expect growth of prices,” concluded the Gaidar Institute’s expert Natalya Shagaida.