Rusprodsoyuz predicts that by January we can expect a decrease in average prices for carrots, cabbage and potatoes. At the same time, cucumbers and tomatoes are seasonally subject to price increases in winter. Details are in the Izvestia article.
Socially significant
Currently, the largest federal retail chains are voluntarily restraining their markups on “first price” goods in 25 categories of socially important food products, the press service told Izvestia FAS Russia.
“The initiative to limit markups is supported by a large number of regional retail chains, including those included in the Union of Independent Chains of Russia, and non-chain retail stores,” said the FAS Russia.
IN Ministry of Agriculture Izvestia was told that during the New Year holidays, the food market traditionally experiences an increase in retail prices, which is associated with an increase in demand. Although the ministry does not expect them to increase significantly above the long-term average fluctuations.
“For example, currently producer prices for raw milk are 3.9% lower than a year earlier,” said the press service of the Ministry of Agriculture. — The low level of prices for raw materials is reflected in the minimal dynamics of the cost of finished products, both from manufacturers and in retail.
Chairman of the Presidium of the Association of Retail Trade Companies (AKORT) Igor Karavaev informed that at the end of this year, retailers and suppliers faced a difficult pro-inflationary situation for some product categories.
In addition to the seasonal factor, manufacturers explained the increase in wholesale prices by the rise in prices of imported raw materials, fuel, logistics, spare parts for equipment, fertilizers and veterinary drugs, and currency exchange rate fluctuations.
At the same time, prices for dairy products, bread, and fresh-frozen fish remain stable, the expert adds.
“In the weeks leading up to New Year’s, sales and customer traffic in stores increase by 20-30%,” says Karavaev. — Traditionally, before the New Year, caviar and confectionery products in the wholesale market become slightly more expensive, but after the holidays prices stabilize.
According to Rosstat, retail prices at the end of autumn for pasteurized milk, butter and cheeses over the year increased from 0.8 to 1.6%, which is significantly lower than the rate of general inflation. At the same time, producers’ prices for cheeses are now 0.7% lower than last year’s level.
As the Ministry of Agriculture explains, the increase in the production of dairy and meat products contributes to a stable price situation in the retail market. For example, compared to the corresponding period last year, the retail price of beef increased by only 6.7% (within the limits of general inflation).
Beef up, sugar down
As Anton Nedzvetsky, Chairman of the Board of the MOZP (Moscow Society for Consumer Protection), notes, an increase in production indicators is a welcome phenomenon, but this only partially affects the final price at retail; increased costs are included in many other areas.
He recalls that the market is now flooded with a phenomenon called shrinkflation. At the same price of a product, its weight (volume) in the package decreases – for example, instead of 1 liter of milk, the package is reduced to 900 ml, and this is poorly taken into account in statistical indicators, he notes.
According to the forecast of the State University of Management (SUM), on the eve of the New Year holidays prices will increase: for cucumbers – by 6-7%, tomatoes – by 3-4%, chicken eggs – by 4-5%, beef – by 10-12%, chilled fish, caviar – by 10−13%, sausages, sausages – by 0.5%, butter and bread – by 0.4%, frozen fish, pasteurized milk, pasta, rice and lunches in a canteen, cafe, snack bar (except for the canteen in the organization) – by 0.3%, hard, semi-hard and soft cheeses – by 2-3%, washing powders – by 0.2-0.3%, toothpastes – by 0.2-0.3 %, shampoos – by 1-2%, TVs – by 1-2%, electric vacuum cleaners – by 0.1%.
Price reductions in December can be expected for granulated sugar – by 2-3%, vermicelli – by 1%, canned meat for baby food – by 0.4%, lamb and margarine – by 0.3%, black tea and millet – by 0.2%, buckwheat – by 1−2%.
— The current increase in meat prices by 10−15% is due to an increase in the cost of imported vitamins and supplements; tangerines, bananas and alcohol will rise in price by 5-15% as goods for the New Year’s table, explains Svetlana Sazanova, deputy head of the department of institutional economics at the IEF State University of Economics, member of the Systemic Economics association. “Against the backdrop of rising meat prices, eggs, a cheap protein substitute, will also become more expensive. In regions with a high share of household plots, the increase in food prices will be less pronounced than in megacities.
From producer to consumer
It is worth considering that the rise in price of goods along the chain from producer to consumer is not linear. Different groups of goods have excellent dynamics, and sometimes even the opposite, notes Albina Koryagina, a partner at the NEO consulting company.
For example, she clarifies, “the leaders in producer price deflation in 2023 were buckwheat, potatoes and, unexpectedly, milk.” Selling prices for buckwheat during the year decreased by as much as 48.6%, and for consumers it fell in price only by 29.7%. The same is true for milk – the producer reduced prices by 4.2%, and for the consumer the price decreased by 2.6%. And, for example, potatoes fell in price evenly throughout the chain – at producer prices its cost fell by 20.3%, on the shelves it was almost the same value – 19.6%. Or cucumbers – their growth is proportional along the entire chain.
“There are a number of products for which retail price increases are being restrained—for example, pork from the producer increased by 4.2%, and for the consumer by 1.6%,” notes Albina Koryagina. — Tomatoes from producers increased by 19.5%, and for consumers by 12.1%. Even the rise in prices for chickens and eggs, which was discussed so much this year, was dampened by retail for the consumer – their prices for the end consumer increased less than the manufacturer’s selling price.
In turn, a member of the General Council “Business Russia”, Chairman of the Board of Directors of Berega JSC Yuri Korobov notes that the final cost of raw materials in the horizon of even 30-day planning will not decrease, rather the opposite.
“Wholesale prices are now rising, as the same Ministry of Agriculture explains, due to increased demand,” says Korobov. — Efforts to export supplies have seriously unloaded stocks in warehouses, and there has also been a reduction in imports in certain categories to a minimum level.
All this, according to his forecast, in the future may well lead to an increase in the cost of products by up to 15%.
The interlocutor does not see any prerequisites for reducing prices, because retail is not set up for this, as practice has already shown. And even if wholesale prices from the manufacturer fall, delays at retail occur at best after six months, or even not at all.
“Therefore, the main hope for state regulation of the situation lies with the antimonopoly service,” says the expert. — It is necessary to remember that the New Year and Christmas holiday season is the highest in retail. Then there is a decline in requests, but not many of the goods and products that were in demand remain on the shelves – they were simply sold out, taking advantage of various promotions and discounts.
What will happen in the post-New Year weeks
Rusprodsoyuz reminds that on the eve of the New Year holidays, suppliers and networks make money on sales volumes, which increase at the end of December. Moreover, in recent years, more products for the New Year’s table have been sold on promotions.
“For some categories, price increases should be expected due to objective reasons,” predicts Dmitry Leonov, deputy chairman of the board of the Rusprodsoyuz association. — The same eggs are becoming more expensive due to a number of factors: consumption surges, the epidemiological situation with bird flu, rising egg production costs, logistics and packaging prices, spare parts for sorting machines, vaccines and premixes depend on the exchange rate and are often delivered by parallel imports. A new factor has also emerged – a shortage of personnel and rising wages against this background.”
The expert notes that cucumbers and tomatoes are traditionally subject to seasonal price increases in winter due to the lack of supply of cheap domestically produced open-ground products on the market.
Irina Svetlova, an analyst at the Center for Market Economics, suggests that by the beginning of the new year it will still be possible to contain the rise in prices for food products, which will be due to both administrative pressure on producers and retail chains and the stabilization of the national currency exchange rate. But how long this situation will continue after the New Year holidays will depend not only on the volume of production by domestic manufacturers, but also on the ruble exchange rate, the expert notes.
“And the point here is not only in the cost of imported equipment, feed additives and veterinary drugs, which, of course, put pressure on the cost of products, for example, in the livestock and poultry sector, but in the usual market rules,” the economist sums up.