Russian bread prices may rise 5-10 percent in the fall in the wake of rising grain prices driven by drought in some of Russian regions, but major price swings are unlikely, Russian Grain Union President Arkady Zlochevsky said on Wednesday.
“If we’re speaking about how the current developments may affect bread prices in the fall, we do not expect a steep rise in the prices because there are not any special grounds for this and these prices should be expected to rise slightly, within 5-10 percent,” Zlochevsky said.
A kilo of bread costs 33-34 rubles ($1.03-$1.06) while a loaf of bread is half this price. Therefore, the price of bread may rise to 37 rubles per kg ($1.16) in the fall, he said.
“We calculated the worst-case scenario: if the price of grain rises from 5,100-5,200 rubles ($159-163) to 9,000 rubles ($281) and how this may affect the price of bread per kilo, this increase would directly add no more than two-three rubles per kilo of bread, or one or one and a half rubles per loaf,” Zlochevsky said.
The grain price does not have as much effect on the cost of bread as other factors, such as energy costs and wages, he said.
Vedomosti business daily reported on Monday Russian agricultural producers have started talks with the country’s largest food retail chains over price increases of up to 20 percent for some food products.
Bread suppliers are seeking a price increase of 10 percent on average, while bakery producers want price hikes of around 15-18 percent. Food suppliers claim their costs have risen due to increasing electricity and utility charges from July 1, and soaring grain prices.