The Russian Ministry of Agriculture has proposed banning the export of poultry meat for six months to curb rising prices within the country. According to the department, over the past year the cost of production has increased by more than a quarter as a result of a decrease in production volumes and rising exchange rates. President Vladimir Putin has already drawn attention to the situation and demanded that the government take timely measures to solve such problems. Experts believe that joint actions by the authorities and business should stabilize the situation with prices.
The Russian Ministry of Agriculture has proposed banning the export of certain types of poultry meat from the country for six months. This is stated in the draft government decree published on Thursday, October 26. According to the document, the initiative is necessary to prevent a shortage of products in the domestic market and curb the rise in consumer prices.
As noted in the Ministry of Agriculture, today a significant increase in the price of poultry meat has been recorded in Russia. Thus, according to the department’s assessment, over the past 12 months, price tags for this category of goods in stores have risen by more than a quarter.
“The situation is primarily due to a decrease in production volumes of these products in recent months and an increase in their cost against the backdrop of a high US dollar. In addition, the current situation contributes to the excessive attractiveness of exporting poultry meat compared to supplies to the domestic market,” the ministry explained.
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According to the Ministry of Economic Development, one of the most expensive consumer goods in the country recently, along with vegetables, has been chicken meat. Over the year, its average retail price increased by 26.2%, which was almost four times the general inflation rate (6.6%).
The day before, the country’s President Vladimir Putin drew attention to the problem. During a meeting with the government via video link, the Russian leader demanded an explanation from the head of the Ministry of Agriculture, Dmitry Patrushev, who joined the discussion from the new poultry center.
“Dmitry Nikolaevich, the fact that you are communicating with us from the chicken coop is great, it enlivens our work today, the meeting with the government, of course. But why has chicken become so expensive?” Putin asked.
According to Patrushev, in August the volume of poultry meat production in Russia decreased slightly, but the department, together with business, is already working to solve the problem. At the same time, the minister stated that there were no economic prerequisites for increasing the cost of production and noted that poultry farmers “feeling their social responsibility, have already begun to lower the price of chicken.”
Meeting of Vladimir Putin with the government
The Ministry of Agriculture expects to see a positive effect in the near future, added Dmitry Patrushev. Vladimir Putin, in turn, asked the government to respond more quickly to such challenges in order to avoid similar situations in the future.
“They (manufacturers. – RT), okay, they are engaged in business, and the government must turn on known mechanisms in a timely manner, including purchasing imports from our closest neighbors: from Belarus, from the same Kazakhstan. Well, it’s true… But we just need to do this in a timely manner, then there wouldn’t be such an increase (in prices – RT),” the president emphasized.
Under close supervision
It should be noted that at the beginning of October, the Federal Antimonopoly Service of Russia sent requests to key chicken meat producers to analyze the cost of production and the validity of established prices. If signs of violation of antimonopoly legislation are detected, the agency intends to take action against the companies.
“The largest chicken meat producers PJSC Cherkizovo, GAP Resurs and JSC Prioskolye occupy a collective dominant position in the commodity market. This means that companies can jointly influence the competitive environment… If this position is abused and monopolistically high prices are set, antimonopoly measures may be applied to organizations, including turnover fines,” the FAS warned.
As Ilya Bereznyuk, managing partner of the Agro & Food Communications agency, told RT, at a certain point, chicken meat production in Russia began to decline amid occasional cases of poultry diseases at enterprises. At the same time, the increase in foreign exchange rates led to an increase in the cost of some feed and equipment, and business began to include these costs in the final cost of products.
“The desire of the authorities to influence prices is understandable and understandable. Now the main task of the government is to ensure the necessary level of raw materials on the market for both processors and retail chains. Therefore, with close interaction with market participants and supervisory authorities, I think the Cabinet of Ministers will be able to overcome the negative trend in pricing. The measures taken should have a positive impact and lead to market stabilization,” Bereznyuk suggested.
According to him, the details of the discussed ban on the export of poultry meat are still unknown. At the same time, as the specialist noted, today Russia mainly supplies offal products abroad, such as hearts and paws, which are popular, for example, in China, but are not in high demand within the country. In this regard, a more effective measure to curb price increases may be an increase in chicken imports from friendly countries, announced by the president, experts say.
“The Russian market remains a priority for our manufacturers. We produce about 5-5.2 million tons of products per year, and supply much less abroad. At the same time, we already have imported poultry meat on the market, primarily from Belarus and Kazakhstan, and if necessary, we can increase purchases from Brazil and Argentina,” Sergei Yushin, head of the executive committee of the National Meat Association, told RT.