Min: Sugar, sunflower oil makers, shops to keep prices until Apr

MOSCOW, Dec 14 (PRIME) -- Sugar and sunflower oil producers as well as the retail chains are to agree to stabilize the prices until Sunday with the deals to be in force until April 2021, Economic Development Minister Maxim Reshetnikov said a government meeting on Monday.

“Until December 20, the agreements between the producers of sugar and sunflower oil and the retail chains will be struck. Under the deals, the producers will reduce prices for the retail chains, while the federal and regional retail chains will cut their prices. The agreements will be in effect until the end of the first quarter of 2021,” he said.

The government will also introduce an export duty on wheat simultaneously with the grain export quota.

“Now regarding bread and flour. The government has received a draft ruling on introduction of a grain export quota of 17.5 million tonnes from February 15, 2021 through June 30, 2021. We also submitted a draft ruling to introduce an export customs duty of 25 euros within the quota and of 50%, but no higher than 100 euros outside the quota,” Reshetnikov said.

He added that the duty will be in effect for the same time period as the export quota.

The government may also slap an export duty on sunflower oil if the price agreements don’t work, he said.

The ministry also suggested that the government set the maximum threshold for fluctuation or prices for socially important goods after which the government is allowed to regulate the prices directly to 10% over a 30-day period, cutting it from the current 30%, he said.

At the same time, the government plans to provide state support to the producers of sugar and bread and to the processers of flour in 2021.

“Regarding sugar, the producers will be able to receive cheap loans at interest rates from 1% to 5% to buy sugar beetroot for processing,” Reshetnikov said, adding that the Agriculture Ministry is also to work on expansion of the sowing area for the sugar beetroot in Russia.

“To support the producers of flour and of bakery plants, the Agriculture Ministry has submitted draft rulings to the government encompassing a subsidy for the flour makers and compensation of some costs connected to the purchase of wheat, and a subsidy for the bakeries to redeem some costs connected to the purchase of flour,” he said.

Agriculture Minister Dmitry Patrushev said that the government’s measures to stabilize food prices will reduce the retail price for sugar to 46 rubles per kilogram and for sunflower oil to 110 rubles per kilogram. The prices for food-grade wheat should be reduced to 14,000 per tonne in 2020 and to 13,000 rubles per tonne until the end of February 2021, he said.

The Agriculture Ministry is also ready to consider lifting an import duty on cane sugar, if the agreements with producers do not result in contraction of prices, he added.

Prime Minister Mikhail Mishustin supported the idea to limit the allowed price fluctuation range for staple food to 10%. He also said that the price stabilization measures should be systemic, and that the government should track the situation at each stage from production to retail. The relevant ministers are personally responsible for the situation, he said.

The Agriculture Ministry and the Industry and Trade Ministry are in charge of the agreements that the producers of sunflower oil and sugar are to sign with the retail chains until Sunday. The Federal Tax Service will oversee compliance with the agreements, Mishustin said.

President Vladimir Putin’s spokesman Dmitry Peskov told reporters that Putin did not discuss the cost of loans for farmers at his recent meeting with the government. The government should first outline the instruments to stabilize the food price, he said.

The Kremlin does not link the food price increase with inflation, as the prices are growing for the most basic food that Russia produces on its own, he said.

(73.1195 rubles – U.S. $1)

End