The Russian”Communiqué” reported on March 22 that the Russian government held an inter-departmental working group meeting on important commodity price monitoring and response and made a series of work arrangements. Details are as follows:
First, in order to continue to control the retail prices of sugar and sunflower oil within the acceptable level of the public, the Federal Anti-Monopoly Service, the Ministry of Agriculture, and the Ministry of Industry and Trade are instructed to hold talks with enterprises to discuss the effective period of sugar price limit measures from 4 June 1st was extended to June 1st, and sunflower oil was extended to October 1st. At present, according to the price limit agreement signed by Russian producers and retail chains from December 2020, the starting price of sugar is 36 rubles per kilogram and the retail price is 46 rubles; the ex-factory price of sunflower oil is 95 rubles per liter and the retail price is 110 ruble. This measure has achieved certain results.
The second is to provide subsidies to sugar and sunflower oil producers. Starting from April 1, if sugar producers do not raise prices, they will be subsidized by 5 rubles per kilogram of their retail sugar for a period of up to 6 months. The total subsidy is expected to reach 3 billion rubles (approximately US$40 million); for example, sunflower oil producers strictly control prices, and will also receive a six-month production cost subsidy. This will stimulate producers, increase the supply of”shelf” goods, and put pressure on price increases in various fields.
Third, the Eurasian Economic Commission is considering abolishing the import tariffs on sugar (not exceeding 350,000 tons) from May 15 to August 31, 2021.
Fourth is to expand the planting area of sugar beet to 1 million hectares.
It is expected that the above measures will help to obtain more than 6 million tons of sugar, which is sufficient to meet the domestic market demand.
According to data from the Russian Statistics Bureau, as of March 15, Russia’s annual inflation rate reached the highest level since November 2016-5.8%. It is expected that inflation will gradually slow down in the future.