Cold summer-2017 fueled food inflation

Rosstat published frightening figures: in the last six months the national average carrot has risen by 79%, onions — by 79%, potatoes — by 117%, cabbage — by almost 200%! Optimists calm: say, this is not the first time, and from July will begin a seasonal decline in prices for vegetables and fruits with berries, which will last until September. There will be time enough to get his fix of vitamins and also make preparations for the winter in the form of preserves pickles, as in former years. Experts are realists of a different opinion: the September fruit and vegetable production could grow by another 20%. And the culprit — the whims of mother nature: Arctic cyclone, which covered the North-West of Russia in may-June, plus a downright monsoon rains, and even hurricanes, tornadoes, hail throughout our vast country.


photo: Gennady Cherkasov

As a result of such weather conditions the sowing had to be postponed the national average for two to three weeks. So cleaning of ground vegetables moves even more unpredictable September. And if again will charge rains? So, collect no time, and the fall “borscheva set” will be at the price of gold, and the winter — and completely inaccessible to the purse of many Russians.

Import helps

According to experts of the agricultural market, loss of crops in the European part of Russia and in the Stavropol region this year will be about 20-30%. The situation can save the economy of the southern regions (Krasnodar region) and Siberia — but only partly.

Senior analyst “Alpari” Roman Tkachuk drew attention to the negative consequences of crop failure: “Many producers are now on the verge of profitability. Insurance against possible climate losses are not exercised, grants from the state should not wait. For them, one of the few solutions is to shift the cost of all losses on to the consumer”. Do I need to explain that it is fraught with the rise in prices of vegetables in the fall by 10-20%… However, smooth out the picture may be the import of vegetables from Europe, because there the summers are hot and the problems with the harvest should not be. So this year on the shelves of our stores will be dominated by imports, the expert emphasizes.

According to the chief analyst of the National fruit and vegetable Alliance Kirill Lashina, at the beginning of June, the share of imported fruit and vegetables by 20% in comparison with the same period last year, and berries — and at 50%.

Note that our import capabilities are limited. After Russia imposed food embargo of agricultural products from EU countries, and, according to a recent decree of the President of the Russian Federation, they will act from now until the end of 2018. “However, for anybody not a secret, — says Kirill Lachine — that sanctioned agricultural products, including tomatoes Turkish and Greek fruit, still penetrates to Russia, and by completely legal means: through Belarus, Azerbaijan, Abkhazia and other friendly countries. Though not in the amounts that were previously, but still”. By the way, a significant rise in prices of onion this year experts attribute to the reduction in import offers in the market.

That the current year will be very different from harvest 2016, they say, and the reports of the Ministry of agriculture. Cleaning of grain and leguminous crops, which started in the Crimea, Adygea, Krasnodar territory (now she has joined the Dagestan Republic, Stavropol Krai, North Ossetia, Chechnya), in comparison with last year is overdue by two weeks. The first results are appropriate. If at the end of June 2016 was already harvested more than 2 million tons for the same period this year — a little over 380 thousand tons. A noticeable lag.

However against the grain experts are optimistic. As noted by Dmitry Leonov, Deputy Chairman of the Association “Rusprodsoyuz”, of grain this year will be slightly less than 2016, but it is not critical, because last year was a record harvest. But compared to 2014 and 2015 the figures of the current year show growth. “We expect a harvest of 100 million tons, which is by far enough to ensure the needs of the population. Plus large stocks from last year. With such volumes of grain on the market prices will go down, so the rise in price of bread, we do not expect”, — says the expert.


photo: Ivan Skryplev

Bumblebees do not have time

But if the grain situation is not so critical, of garden berries and stone fruit (plum, cherry, juniper) are not. A typical situation in these regions is as follows: due to the may frosts fruit trees (including Apple and pear) flatly refused to dissolve their kidney. It even seemed that they were frozen over the winter. And that’s when the trees finally bloomed, they were attacked by heavy rains. Rare bumblebee will fly in the rain at pollination, the flower should be at least a little dry. But these solar “Windows” wasn’t enough, now the insects are not managed. The ovaries are very few. With gooseberries and red currants situation is good, a lot of berries, but black will be less.

Strawberry seems to be blooming, but little help. A lot of flowers-“dummy”, all the power went out in strong foliage. Due to excess moisture on the palate, it is likely to be sour and watery. Sweet berry can treat remontant varieties (fruiting until autumn), but again, we have a lot of sun.

Experts estimate the loss of crop of berries and stone 20% and, accordingly, the same amount waiting for them to rise in price in the coming months. Which will inevitably entail the growth of prices for a whole line of products that use the fruit raw materials, namely, juices, fruit drinks, compotes.

Potatoes came under the knife

Potatoes and other ground vegetables has also been found in the area of weather risk. Two previous crop year, in all likelihood, put to sleep the vigilance of the responsible officials. Therefore, in 2017 the acreage under these crops it was decided to cut: potatoes — 18%, under the other “primer” — almost a quarter.

Moreover, planted with a large delay vegetables are now forced to grow in waterlogged due to heavy rains the soil, which will certainly affect their ability to keeping capacity (i.e. long-term storage). So if September and will provide an opportunity to harvest, the winter he can simply rot in storage.

Fortunately, not all regions of Russia was rejected from nature. Lipetsk and Ryazan farmers say that they have everything in order: the harvest will be good. However, the prices for early potatoes”Sorochinska” (the usual period of maturation of the root 90 days), which they sell on the capital’s fairs of the day, “bite”, and well: 65-80 rubles per 1 kg, carrots cabbage cost 65 rubles., onion — 40. The same applies to berries and stone fruit: cherry sold in 250, strawberry — 350-380 rubles per 1 kg.

In fairness, we note that not all experts are sounding the alarm. In particular, according to Dmitri Leonov, the situation with the vegetables until the end of summer will be stable, and new growth is not expected. According to him, the increasing number of proposals for potatoes, carrots, beets, cucumbers, and tomatoes — which should, in theory, lead to lower prices. If to speak about longer-term trends, it should be noted that the country built and upgraded a large number of greenhouses. This is how the expert believes, in the case of lowering the yield of open ground should be a factor of cost containment.

Speculation in the law

Of course, good news, especially if they come from direct market participants — farmers, processors, distributors, — I want to believe. However, there is another important link in the chain that actually delivers the products to buyers through the shelves, namely, trading network. There may be different “miracles”, sometimes discouraging the consumer.

In a case with buckwheat. Now the situation is unpredictable with the cereals on the Russian market more than happy and, according to all forecasts, should be kept until the next season. According to Rosstat, buckwheat stocks in the moment 50% more than last year. Plus acreage this season increased by one third. In the wholesale segment prices are stable, no growth was observed.

However, the trading network is “tranquillity”, apparently, is not satisfied. Periodically from different cities come to the news that one or another network suddenly drives up the price of buckwheat. The author of these lines can refer to your own sad experience: just last week in one of the capital’s online store middle-class 900 g cheapest cereals were sold for 33 rubles, and in my next visit to the store two days later the same bulk and from the same manufacturer have been sold for 55-90.

Anna Bodrov, senior analyst “Alpari”, directly links this increase with the will of the seller. “Retail rewrites tags in their own way that is not contrary to the policy of the Federal Antimonopoly service”, — says the expert. According to her, the peculiarity of buckwheat as a commodity is that the demand for it within the calendar year is consistently high. With falling incomes (in Russia, this trend is already 29 months), the consumer replaces the buckwheat the more expensive side dishes. And if the demand increases, the price also is the law of the market. In fact, says Bodrov, the cost of production of buckwheat is not the highest, it can be up to 10 roubles for kg. All the rest is the cost of handling, transport, packaging, profit, wholesale suppliers and retail chains.

Dmitry Leonov, adds: “we should Not forget that buckwheat — a product of increased sensitivity to market fluctuations and stronger than the other responds to various speculations. Therefore, we do not exclude the possibility of artificial increase of prices.”

In this regard, interviewed by “MK” experts agree in opinion that now there are certainly a lot of those (from producers to traders) to speculate on the subject of crop failure, using the factor of adverse weather conditions in order to deeply get into the consumer’s pocket — even without any objective reason.

Speaking about the threat of the autumn rise in price of food, many of our interlocutors mentioned another risk factor, not weather, and economic — our national currency. While the ruble remains relatively stable afloat. And if suddenly shaken? It is easy to imagine what will happen to the prices of fruits and vegetables, because import will only increase. Then Rosstat certainly have to exclude borscheva set from the list of foods the prices of which it monitors, in order not to spoil inflation, scheduled for the year at 4%. And a precedent: in the spring of this year tea black already excluded from reports of the statistical office — apparently rose in price very quickly and detracted from accountability.

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