No Price Surge in Russia After Price Freeze Ends

February 2, 2008

There will be no major price hikes in Russia once some food prices are “unfrozen,” the finance minister said on Saturday. “Prices will grow slowly, but there will be no surge [after the price freeze is lifted],” Alexei Kudrin said in a TV interview.

Under an agreement, concluded last fall between Russian food producers and major retail chains, prices of milk, eggs, vegetable oil, bread and kefir (a fermented milk drink) were frozen from October 24 until January 31, 2008, but was then extended for another three months.

Food price hikes accelerated in Russia over the summer and autumn, following trends on world markets. According to the country’s statistics service, the fastest growth in September last year was demonstrated by rapeseed and soybean oil prices (13.5%), pasteurized milk (9.4%), fermented milk products (7.9%) and curds (7.4% - 7.5%).

Driven by food price growth, consumer prices in Russia grew 7.5% in the first nine months of 2007, or 0.3% more than in the same period of last year. In September alone they climbed 0.8%, making the government’s 8% inflation target for 2007 unrealistic.

Source RIA Novosti

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