Alla Barinova, Bord Bia Moscow
In Russia consumers have been confronted with a rise in the cost of food products as the long term effects of this year’s heat wave on domestic production are being felt. The Ministry of Agriculture announced this August that Russian grain production has fallen by 31% this year with the drought also preventing winter crops from being sown. The current losses in Russia’s economy from the drought are estimated at about $7 billion to $15 billion.
In an interview with Managing Director of X5 retail group, Lev Khasis it was reported that the price of all types of grains has risen. The price of buckwheat has risen by 50-100% across the country. In X5 Retail stores the price of buckwheat has risen by 60%, wheat flour by 90%, milk and sugar by 10-15%, chicken 5-10%, sunflower oil by 15%, rice by 35% and pea split by 20%.
X5 suggest that the changes to date in retail prices have on average been less than half the rise evident in the cost of products. He expects this panic period to last for two-three months, however there is no guarantee that prices will return to previous level in the short to medium term.
Russian farmers fear that the 100 day drought will cause long-term damage to the country’s agricultural sector. The Agriculture Ministry estimated that losses so far amount to 26 billion roubles ($850 million).
Farmers predict an increase in meat prices because of the increased price of feeding materials. In Russia farmers mainly feed cattle with grain. Farmers that usually feed 30 month old cattle with grass have had to switch to grain diets during the summer drought. This is also expected to reduce the amount of milk produced.
These price increases will make Irish pork and beef exports more competitive especially as the BSE testing requirements have been raised from 24 months to 30 months for Irish beef.