"Rusprodsoyuz": the growth of exchange rates will affect the cost of food

The growth of exchange rates in RUSSIA may affect the cost of food, said Dmitry Leonov, Deputy Chairman of the Board of Rusprodsoyuz. The exchange rate of the Central Bank on February 25 reached 86.93 rubles. per US DOLLAR , on February 26 it is set at 83.55 rubles. According to Leonov, it is premature to make any serious forecasts, but one should not forget that the currency component is present in one way or another in all technological chains of food production.

According to Rusprodsoyuz, the market will be equally affected by the possibility of delivering goods through the usual transport corridors and the consequences of changing logistics routes. “First of all, the possibility of supplying ingredients for the food industry, and what stocks are available in warehouses, will affect, secondly, the dynamics of exchange rates, which affects imported products imported into Russia (tea, coffee, imported fruits and vegetables). There is a dollar component in almost all food products from grain to the finished product,” Leonov said.

In order to prevent a serious rise in prices and ensure the supply of food products on the shelf in the event of a prolonged increase in exchange rates, it is already important for the commodity distribution chain and supervising ministries to develop fair conditions for behavior, if necessary, including prompt price adjustments, Leonov said. 

Against the background of the aggravation of the geopolitical situation in Ukraine, retail chains and food suppliers have already begun to prepare for a possible rush demand for food in Russia. Some large networks, according to manufacturers, have already begun to increase the volume of orders for products that can be stored for a long time: canned food, cereals, pasta, SALT, SUGAR, etc. Leonov recalled that a similar trend was observed during the start of the covid-19 pandemic , when there was a rush demand for food and essential goods in Russia.

In turn, the Ministry of Agriculture recalled that Russia fully provides itself with the main types of food: grain and its products, MEAT and fish products, sugar, vegetable oil and other key food products. “Own production of dairy products, vegetables and fruits already provides a significant part of domestic consumption,” the ministry said in a statement. - The need for imported goods is insignificant and mainly falls on products that are not produced in our country due to climatic conditions. At the same time, Russian importers work with a wide range of supplier countries.” The domestic market is reliably protected, and risks to food security are excluded, the ministry emphasizes.

Georgy Ostapkovich, DIRECTOR of the HSE Center for Market Research, said that any fall in the national currency always increases the cost of imports of all components of the cost of production. “There is a huge import component in agriculture: compound feed, chicken crosses, watering machines, tractors, harvesting equipment, packaging material, and so on. Manufacturers include price increases in the final cost of sales. The question is how intense the fall of the ruble will be. I think that the indicator will not return to the starting values, ”the expert believes.

If inflation does not stop growing, the Central Bank will not stop at today's key rate of 8.5%, but will raise it first to 10%, and then, quite possibly, to 13-14%, Ostapkovich predicts. “This means an increase in the cost of loans, leading to a reduction in investment and consumer demand. As a result, there will be a drop in the rate of economic growth, that is, money will be more expensive, it will be more difficult to buy it from banks, the expert argues. - All these problems reach the point of bifurcation, which Rusprodsoyuz announced. I generally agree with that."

Grocery suppliers brace for rush demand 

Meanwhile, the Eurasian Intergovernmental Council adopted an order to support the Eurasian Agroexpress, a joint project of the countries of the Eurasian Economic Union for the implementation of accelerated rail and multimodal transportation, BelTA informs. The goal of the project is to increase the volume of mutual deliveries and exports of agricultural products and food, as well as their diversification. We are talking about the supply of oil and fat, dairy, meat, fruits and vegetables and finished food products, as well as other food products with an emphasis on marginal goods. At the first stage, regular shipments outside the EAEU will be organized in two directions - to CHINA and Uzbekistan, as well as back.