Novye Izvestia's Research: what products will rise in price in 2022

Analytics
Novye Izvestia's Research: what products will rise in price in 2022
Novye Izvestia's Research: what products will rise in price in 2022
21 January, 12:41Photo: 1MI
The whole world is now preparing for the coming rise in food prices: China has already begun to stockpile. And in Russia, people have long been accustomed to looking at the price tags with caution every time they enter stores. Will 2022 come as a surprise to people?

Victoria Pavlova

China has begun to buy food at a record pace around the world. According to the US Department of Agriculture, China in the first half of 2022 will have 69% of the world's corn reserves, 60% of rice reserves and 51% of wheat reserves. This activity of China, together with increased costs for transportation, the purchase of fertilizers and a weak harvest, led to the setting of a new ten-year record in world food prices. According to the FAO, over the year, grain has risen in price by 23.2%, vegetable oils - by 53%, dairy products - by 19.1%, meat - by 17.6%, sugar - by almost 40%.

But what do Russians care about world prices, after all, last fall even Minister of Agriculture Dmitry Patrushev convinced people of full self-sufficiency in food.

“The Russians can be sure that the country's food security will be ensured in all key areas”, - the official said.

All own, dear. Yes, and official inflation, although it is approaching 8.5% by the end of 2021, does not frighten a Russian resident accustomed to crises. But this does not mean that basic goods such as food and clothing have remained at the level of inflation. Novye Izvestia, together with experts, analyzed how 2021 ended and what to prepare wallets for in 2022.

Rising food prices can't be stopped

In order to sort out food prices, NI turned to Rosstat data and compared how much food cost in December 2020 and November 2021 (these are the most up-to-date data available).

Photo:Новые Известия

In the top price increase, almost the entire "borscht set" is traditionally the most affordable and frequently used products for most Russians. Moreover, during 2021, the numbers were often even more frightening: price increases began at the end of 2020, which created a high base effect.

And out of the entire line of food products in 114 positions, which is covered by the monitoring of Rosstat, only four fell in price last year.

Photo:Новые Известия

It's hard to live on vodka with cucumbers, or cognac with grapes. Last year, people had no choice but to save. Polls show that 60.4% of the population spend half of their income on food, and 16% of Russians spend almost all of their earnings on food. Macaroni on sale - that's our salvation.

Already by January 14, 2022, inflation in annual terms has already accelerated to 8.62%, and the Central Bank warns that the deviation of inflation from the target value may be larger and longer than previously planned.

Vladimir Klimanov , head of the Department of State Regulation of the Economy at the RANEPA, believes that growth in food prices in 2022 cannot be avoided:

- We should expect continued growth in prices for agricultural products, and this is not due to some bad actions of the authorities or some factors that may have a negative connotation, but to the fact that so far it has not been possible to stop high inflation at the global level. Commodity prices are rising all over the place. In 2021, the prices of fertilizers rose sharply - for potash, nitrogen, whatever - they rose faster than the prices for the same food. There was an increase in the cost of building materials, metal and engineering products.

Dear sweet life

The focus of attention in the near future was confectionery. The largest manufacturers have already warned retail chains about the imminent increase in prices due to rising costs for raw materials and packaging. Mondelez (Alpen Gold and Oreo brands) warned of a price increase of up to 19%, Khlebprom (Uslada and Private Gallery brands) is preparing to raise selling prices by 23%, Slavyanka (Chudo and Levushka brands) ) - up to 18%, United Confectioners (Krasny Oktyabr, Babaevsky, Rot Front) - up to 18%, Ferrero (brand Raffaello and Kinder) will rewrite the price tags by 6% up.

For sure, prices for vegetable oil and sugar, which were previously held back by the government, will go up. The Ministry of Industry and Trade and the Ministry of Agriculture announced that they would no longer freeze prices for these products. Although often the statements of ministries in terms of price regulation diverge from reality. The Ministry of Agriculture claimed that it "does not plan to conclude price agreements with food producers and retail chains." Recently, however, retail chains, voluntarily, simply on the recommendation of the FAS, began to announce a limitation of the trade margin on the most important goods at a level of 10%. And some products are sold at cost. This action was joined by X5 Retail Group, Magnit, Auchan, Lenta and Verny. How long retail chains will be able to sacrifice their profits is not known.

According to Vladimir Klimanov, state price regulation must be approached very carefully so as not to break firewood and make it even worse:

- Such interference is possible, but it should be limited. This can be done in some emergency conditions, associated, for example, with some kind of peak demand for any goods, when you just need to bring down speculative relations associated with certain groups of goods, which have developed, among other things, due to natural factors, crop failure , for example, or some other conditions and reasons. The main thing is that such regulation by the state does not have a permanent character. It is necessary to maintain, where possible, the support of agricultural producers. But it is not advisable to regulate prices for agricultural products in a wide range and for a long period.

Raw materials for humus, or why potatoes cost 100 rubles per kilogram

And with support just not everything is smooth. The Ministry of Agriculture focuses on crop areas, although the problem of food prices is exacerbated by the fact that issues with the storage and processing of products have not yet been resolved. According to the Institute for Comprehensive Strategic Studies, at least 60%-70% of the crop must be preserved and processed. Otherwise, agricultural products will simply deteriorate, because according to the NIFI of the Ministry of Finance, the industry's need for storage and processing capacities is satisfied only by 30% -40%, and for primary processing - only by 20% -30%.

In theory, more vegetables could be grown, but an excess of them would only push prices down at harvest time, and the excess would simply rot. The Ministry of Agriculture is already considering options for increasing the supply of potatoes from the CIS countries. If in 2021 600 thousand tons were delivered to Russia, then in 2022, according to Alexey Plugov , the General Director of the AB-Center expert and analytical center for agribusiness, supplies of 800-900 thousand tons of potatoes may be required. There will be a strong ruble - there will be affordable potatoes, and if the ruble flies down against the backdrop of the Ukrainian conflict, then again we will have to observe double-digit price dynamics. Farmers who are unable to predict their costs and engage in storage and processing of products due to insufficient state support are already expecting a rise in potato prices to 100 rubles per 1 kg.

State support is senseless and merciless

“It is no longer possible to isolate oneself from the outside world and lock oneself behind an iron curtain with one’s own grain and vegetables in order to maintain prices”, - Vladimir Klimanov believes:

- You can use the mechanisms of customs duties, either import or export, in order to stimulate products on the domestic market, you can introduce some other tools, but it is clear that in the current conditions it is completely fenced off from the supply of products from other countries and prohibit the export of goods to other countries, if the demand for them is high enough on the world market, it is simply impossible. Now this is nonsense.

So last year, export duties on grain did not help make bread cheaper. In the Krasnodar Territory, which accounts for the lion's share of grain production, during June 2021, due to the introduction of export duties, category 3 wheat fell from 15 thousand rubles per ton to 12.2 thousand rubles ( monitoring data from AgroNovosti). But by the end of August, prices soared to 16.5 thousand rubles per ton. Exporters simply shifted the additional financial burden on producers who have nowhere to go.

In terms of prices for fruits and vegetables, according to Vladimir Klimanov, there is only hope for the effect of a high base: everything has already risen in price so much that a further increase in prices in percentage terms will not be frightening:

- It is hardly possible to speak about a significant rise in price. The price increase in 2021 may have a dampening effect on the increase in agricultural prices in 2022.

No bread - eat meat

Vegetarians will have a hard time in 2022: vegetables will either be expensive or very expensive. But for meat-eaters there is good news: their favorite products should not go up much in price. Unless, of course, force majeure happens. And last year, meat products held up relatively well: chicken took 5th place in our rating of the most expensive products (+27.4%), beef took 25th place (+14.5%), pork - 32nd place with an increase of 12.4%. %, turkey - 52nd place with an increase of 9.1%. And here, according to the head of the National Meat Association (NMA) Sergey Yushin , global trends could not do without:

- Indeed, in 2021 there was a noticeable increase in prices, primarily due to the fact that at the beginning of the year, due to animal diseases both in the Russian Federation and in many countries of the world, the supply of broiler meat, first of all, decreased sharply. And when supply goes down, prices go up because the demand for meat doesn't go down. Only by the end of 2021, production recovered to the volumes of 2020, and accordingly, starting from October 2021, wholesale prices for poultry, pork and beef began to fall. Average wholesale prices have fallen, and significantly. Of course, the seasonal factor also plays a role here, but the main thing is the rapid recovery of production in the pork sector.

But in 2022, meat products, according to Sergey Yushin ’s forecast, should become a bulwark of stability:

- I think that prices may even decrease in the near future - this is due to the seasonal factor, due to the fact that a decision was made to import 100,000 tons of pork and 200,000 tons of beef this year duty-free, which will also affect the availability of meat, and since we expect a serious increase in pork production - somewhere around 300 thousand tons in slaughter weight, this is about 7-8%, then, of course, there will be an excess supply that will keep prices at a fairly low level compared to the cost, which continues to grow. And pork prices will put pressure on poultry meat.

Import-dependent self-sufficiency

Of course, no one will give a 100% guarantee against price increases. At any moment, another outbreak of bird flu or African swine fever may occur, or there may be problems with the provision of animal feed. Import substitution has not yet affected the production of essential amino acids and vitamins. Of the entire spectrum of the most important additives, only lysine is produced in Russia. And only at one enterprise (CJSC "Plant of Premixes No. 1"), which can no longer cover all the needs of the market. All steel is imported. Sergey Yushin adds that we cannot do without the import of seed material:

- We produce compound feed ourselves. We import a lot of certain complex amino acids and other feed additives. Some of them are 100% dependent. In our poultry industry, at least 85% of hatching eggs are Russian. About 15% we import mainly from European countries. And in terms of breeding material, we mainly import. In pig breeding, there is a significant dependence on the import of purebred animals.

The livestock market is currently in a precarious position: for the most part, there is self-sufficiency, but problems can arise at any moment. Until that happens, the anti-crisis lunch can consist of pasta (one of the cheapest calories) and pork. Far from the healthiest food, but millions of people with such prices have no choice and are not expected.

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