Russian ministries discuss options to hold down food prices through long-term contracts

MOSCOW. Oct 27 (Interfax) - Russia's Industry and Trade Ministry and Agriculture Ministry are discussing possible mechanisms to curb the growth of prices for food staples, so the option of restricting their growth by setting minimum and maximum prices, or a price range in long-term contracts between suppliers and retailers might not be the only one, Deputy Industry Minister Roman Chekushov said.

"We are doing this work together with the Agriculture Ministry of the Russian Federation, State Duma deputies and the industry community. We have now agreed that we need to set requirements for long-term contracts on key types of products, where it is necessary to ensure the absence of significant jumps in prices," Chekushov said.

"The option we proposed is a price range. Colleagues from the Agriculture Ministry are proposing to consider the possibility of fixing or setting a formula for prices in long-term contracts based on mutual agreements between the supplier and the buyer," he said, adding that expert discussions are now being held.

"We're not forcing this issue, since in the past few months, since May, we're not seeing high inflation for the consumer basket," Chekushov said.

He said agricultural producers and retail chains are already entering into long-term contracts, without waiting for special regulation to be introduced.

"The amount of such contracts is fairly large. But such contracts are largely of a framework nature, and the initiative being discussed is intended to change this," Chekushov said.