Sugar prices rising in Russia

RUSSIA / FSU POLITICS - In Brief 03 Apr 2021 by Alex Teddy
On March 31 Izvestia reported that sugar factories have suspended sales and deliveries to supermarkets as the sugar sector waits for a state subvention. Food prices have gone up 7.7% in the last 12 months. That is the steepest annual rise since 2016. Living standards are at their lowest in 10 years.Sugar prices soared 70%. The government implemented a maximum price and reduced exports. A USD 00.7 subsidy per kilo to sugar producers has been introduced. This has had the unintended effect of producers' refusing to sell until they receive the subsidy. Subsidies started on April 1 and are due to last until October 2021. Subsidy payments have not yet been received by producers. Retail prices are capped until the end of May 2021.Retail companies normally have 2 weeks worth of stock. However, this is becoming exhausted as stock is sold but not replaced by suppliers.The Audit Chamber advised the government that maximum prices and subsidies could have opposite effect to the desired one. The government states that it has earmarked USD 40 million to subsidize sugar.

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