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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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Friday, Oct. 31

Put your grammar and logical thinking to the test in a fun and friendly environment during the British Book Center’s Board Game Evening starting at 5 p.m. today. The event is free and all are welcome to attend.

Saturday, Nov. 1

The men and women who dedicate their lives to fitness get their chance to compete for the title of best body in Russia at today’s Grand Prix Fitness House PRO, the nation’s premier bodybuilding competition. Not only will men and women be competing for thousands of dollars in prizes and a trip to represent their nation at Mr. Olympia but sporting goods and nutritional supplements will also be available for sale. Learn more about the culture of the Indian subcontinent during Diwali, the annual festival of lights that will be celebrated in St. Petersburg this weekend at the Culture Palace on Tambovskaya Ul. For 100 rubles ($2.40), festival-goers listen to Indian music, try on traditional Indian outfits and sample dishes highlighting the culinary diversity of the billion-plus people in the South Asian superpower.

Sunday, Nov. 2

Check out the latest video and interactive games at the Gaming Festival at the Mayakovsky Library ending today. Meet with the developers of the popular and learn more about their work, or learn how to play one of their creations with the opportunity to ask the creators themselves about the exact rules.

Monday, Nov. 3

Non-athletes can get feed their need for competition without breaking a sweat at the Rock-Paper-Scissors tournament this evening at the Cube Bar at Lomonosova 1. Referees will judge the validity of each matchup award points to winners while the city’s elite fight for the chance to be called the best of the best. Those hoping to play must arrange a team beforehand and pay 200 rubles ($4.80) to enter.

Tuesday, Nov. 4

Attend the premiere of Canadian director Xavier Dolan’s latest film “Mommy” at the Avrora theater this evening. The fifth picture from the 25-year-old, it is the story of an unruly teenager but the most alluring (or unappealing) aspect is the way the film was shot: in a 1:1 format that is more reminiscent of Instagram videos than cinematic art. Tickets cost 400 rubles ($9.60) and snacks and drinks will be available.

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