Russian sugar producers do not overstock after pricing deal

MOSCOW, Jan 22 (PRIME) -- Russian sugar producers don’t overstock after a pricing agreement with the government, they sell their products fully, Andrei Bodin, director of the Union of Russian Sugar Producers, told reporters late on Thursday.

In December, the government announced several measures to fight a food price rise, including agreements with national producers of sugar and sunflower oil that set the maximum wholesale and retail prices for the goods.

“Sugar producers do not keep sugar in storages, they sell it in full, which allows us to cover people’s demand for this socially important product completely,” Bodin said, adding that the producers managed to stabilize the situation and that problems with delivery of sugar to remote regions are being solved on the fly.

The Retail Companies Association (ACORT) said in a statement that it saw no risks of state regulation expansion on prices for other goods.

“Taking into account the recent experience and active work with producers, suppliers, and retail chains that the corresponding ministries and agencies did, ACORT sees no risks of expansion of the state regulation regime on prices for other food,” the statement read.

Pricing stabilization deals are successful, and more than 8,300 companies have joined them. The largest retail chains maintain reserves of all socially important goods that guarantee satisfaction of any consumer demand, the association said.

Sergei Yushin, head of the National Meat Association, told reporters that the situation on the Russian meat market should be stable in 2021, and pork and poultry price growth should be as low as possible. An increase of production of pork by 250,000 tonnes would ensure that, as the amount of resources on the local market will increase. Meat producers are not interested in high prices that dwarfs consumption, while they want demand for meat to grow.

Sergei Lakhtyukhov, CEO of the National Union of Poultry Producers, said feed, veterinary medicines, and packaging prices increased significantly last year. Now, the union expects the government’s regulation of grain exports to weaken the feed price growth.

Arkady Zlochevsky, President of the Russian Grain Union, said in an interview to Govorit Moskva radio station that Russian wheat prices stabilize without state regulation. Unnecessary regulation and restrictions will only cause people to hold on to their wheat stocks causing prive growth, he said.

“Experience shows that we have to look into a balance of resources in the first place in this situation. If everything is good, we should pause for a bit and take no actions so that the market comes round,” he said.

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