The cost of poultry meat and eggs may rise, but will remain within the framework of food inflation, the Ministry of Agriculture of Russia commented on February 17 on messages about a possible increase in prices for these food categories.
Earlier, retail chains notified the Ministry of Industry and Trade about the readiness of producers to raise the selling prices for poultry and eggs to 10% for a number of reasons, in particular, due to the reduction in the supply of products on the market due to bird flu, Izvestia wrote.
“The increase in the cost of feed and imported ingredients, the deterioration of the epizootic situation in a number of regions against the background of an increase in consumer demand for poultry and eggs may create preconditions for a slight increase in selling prices in the short term. The rise in prices is facilitated by the increased competition for available volumes of products between retail and processing, which in some cases are ready to offer higher prices at tenders and under direct contracts, ”the Ministry of Agriculture explained.
According to the department’s forecasts, by the end of the first quarter, the balance of supply and demand will stabilize, given the rather short production cycle in the poultry industry. In addition, the application of customs and tariff regulation measures in relation to grain and oilseeds will reduce the costs of livestock enterprises for the fodder base, which will reduce the cost of production and maintain the level of prices for final products.
The growth of production in this sector, according to forecasts of the Ministry of Agriculture, will also be facilitated by an increase in the availability and expansion of areas for the targeted use of concessional loans. The ministry added that in order to prevent an unreasonable increase in the wholesale cost of products and keep it at an affordable level, work is underway with industry associations and large manufacturers.
“Thus, in 2021, there are no prerequisites for a significant increase in prices for poultry and eggs, which in general, according to the forecast, will remain within the framework of food inflation,” the Ministry of Agriculture stressed.
The ministry also reported on the lack of data from the main suppliers of poultry products on the increase in selling prices and recalled that the average annual prices for these products remained practically unchanged for several years due to a significant increase in production volumes and a high level of saturation of the domestic market. In 2020, the average annual wholesale prices for poultry meat were even lower than in 2019, the Ministry of Agriculture added.
At the end of 2020, a price control mechanism was introduced for basic foodstuffs such as sugar, bread and sunflower oil. In January, Russian President Vladimir Putin signed a law on state regulation of prices for socially important goods.