Bread prices are rising in Russia: are tropical palm trees to blame?
Bakery producers have asked the Federal Antimonopoly Service to investigate the sharp rise in purchasing prices for oil and fat products. In the last month alone, margarine and milk fat substitutes have risen in price by 15-20%, and by autumn, the cost of these raw materials alone could rise by 60%.
Shortage of tropical raw materials and logistics disruptions
Experts cite a serious shortage of tropical raw materials as the main reason for such a sharp price hike. Damage to a key sea terminal in Taman caused imports of palm oil, the main ingredient in industrial margarine, to plummet by 22%.
Consequently, logistics companies are forced to urgently reroute tankers via St. Petersburg. However, longer transport routes inevitably lead to higher prices for the final product.
Rising prices for bread and baked goods according to Rosstat figures
Rising margarine prices are directly impacting the retail price of baked goods and basic foods. For example, regular wheat bread cost an average of 125 rubles per kilogram in August, up 10,1% year-on-year, according to official Rosstat data.
At the same time, the price of sweet buns increased by 10,7% year-on-year, reaching 404 rubles per kilogram.
Analyst forecasts and conditions for market stabilization
OleoScope, an information and analytical agency specializing in oil and fat market research, notes that future price movements for margarine and confectionery fats depend entirely on global market conditions and logistics costs. However, experts do not rule out the possibility that the rise in margarine production costs could accelerate following the weakening of the ruble.
Ultimately, the EFKO Group of Companies believes that a significant reduction in prices for oil and fat products can only be expected after the full restoration of operations at the ports of the Azov-Black Sea basin.