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Inflation Rises as Russia's Food Bans Push Up Prices

Published: August 22, 2014 (Issue # 1825)



  • Economists insist that the bans were certain to strike food prices, and inflation along with it.
    Photo: Denis Grishkin / Vedomosti

Two weeks after their introduction, Russia's bans on Western food imports have sent prices skyrocketing in some far-flung corners of the country as prices began to rise across the board, raising fears that Russia's poorest citizens will pay for the Kremlin's reprisal to Western sanctions.

Some also worry about a destabilizing spike in headline inflation, hardly good news for an economy already in the throes of a sharp economic slowdown. Breaking typical season trends, inflation rose 0.1 percent in the week ending Aug. 18 after two weeks of no inflation at all, pushing up the yearly rate to 7.5 percent, according to data from Rosstat — far overshooting the Central Bank's target.

Certain regions have seen staggering price increases: The cost of chicken legs soared 60 percent in the Sakhalin islands of Russia's Far East, while meat prices in the nearby Primorye region climbed 26 percent and prices on some types of fish rose by 40 percent, newspaper Kommersant reported this week.

But Russia-wide price rises are much milder than in the Far East. The cost of chicken has risen 2.1 percent since the beginning of August, while pork rose by 0.8 percent, frozen fish by 0.5 percent, cheese by 0.2 percent and apples by 0.2 percent, according to Rosstat.

Russia's ban earlier this month on imports of beef, pork, poultry, fruit, vegetables and dairy products from countries that had targeted it with sanctions over the crisis in Ukraine caught retail chains and distributors completely by surprise, giving them little chance to adapt to the new reality.

"[The price increases] are due to the cost of suddenly changing procurement logistics … with barely any transition period," said Maxim Klyagin, a food market analyst at Finam Management.

Officials have assured the public that no price increases should ensue. Hammering home the point, Prime Minister Dmitry Medvedev said this week that the bans "should not significantly affect the situation on the food market" while ordering the government and regional authorities to "monitor the situation." Authorities have foisted masses of price monitoring paperwork on retailers, and reports of threatened countermeasures against price-gougers abound in the media.

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ALL ABOUT TOWN

Saturday, Oct. 25


AVA Expo, the eighth edition of the event revolving around all things pop, returns to Lenexpo this weekend. Geeks, nerds, dweebs and dorks will have their chance to talk science fiction and explore a variety of international pop culture. Tickets for the event can be purchased on their website at avaexpo.ru.



Sunday, Oct. 26


Zenit St. Petersburg returns home for the first time in nearly a month as they host Mordovia Saransk in a Russian Premier League game. Currently at the top of the league thanks to their undefeated start to the season, the northern club hopes to extend the gap between them and second-place CSKA Moscow and win the title for the first time in three years. Tickets are available at the stadium box office or on the club’s website.



Monday, Oct. 27


Today marks the end of the art exhibit “Neophobia” at the Erarta Museum. Artists Alexey Semichov and Andrei Kuzmin took a neo-modernist approach to represent the array of fears that are ever-present throughout our lives. Tickets are 200 rubles ($4.90).



Tuesday, Oct. 28


The Domina Prestige St. Petersburg hotel plays host to SPIBA’s Marketing and Communications Committee’s round table discussion on “Government Relations Practices in Russia” this morning. The discussion starts at 9:30 a.m. and participation must be confirmed by Oct. 24.



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