Agriculture & Food

Russian Foreign Minister Lavrov stated that Russia is prepared to continue to impose restrictions on the export of key foods. Prior to this, the Kremlin has suppressed the prices of major grains such as sugar and flour due to price increases.

In May of this year, the global food price index reached its highest level in the past 10 years, a year-on-year increase of nearly 40%. At the same time, 20 million (that is, one-seventh) of Russians live below the poverty line, and the effects of rationing policies and hyperinflation are still lingering. Food prices have become a key issue in Russia.

According to the Financial Times, Russia’s Minister of Economic Development Maxim Reshetnikov stated that, as one of the world’s largest grain exporters, Russia is considering how to ensure grain exports to the greatest extent possible while protecting domestic consumers from rising prices.

As prices rise, Russia will continue to monitor exports and take further restrictive measures, including imposing export duties on some commodities.

Last December, Russian President Vladimir Putin ordered temporary price controls on key foods such as sunflower oil and pasta. Earlier this year, wheat export quotas were announced, and export tariffs were increased this month.

Moscow said that many people cannot afford the necessities of life until now, and these measures are designed to make up for the decline in income over the years.

In terms of domestic consumption, Russia is removing most of its price caps, but will continue to subsidize staple foods such as bread and flour.

Reshetnikov refers to these export restrictions as price "shock absorbers", which are intended to encourage domestic producers to increase investment in production.

he thinks:

Grain will promote the development of animal husbandry, and animal husbandry will promote the development of dairy industry. In this way, a new value chain can be created to achieve value growth.

No one can guarantee that global food prices will not continue to rise, and any future commercial measures may take the form of tax increases.