Russian Agriculture Ministry expects food prices to stabilize

MOSCOW. March 22 (Interfax) - Russia's Agriculture Ministry expects prices on the country's food market to stabilize thanks to recently adopted measures.

Russian companies in the food and processing industry are now operating in an environment of growing production costs due to rising prices for packaging, ingredients, electricity and other inputs, the ministry said in a statement.

"Currency fluctuations on imported raw materials and the reorganization of traditional logistics routes are also having a significant impact on businesses' costs. Companies are now solving difficulties with logistics by promptly changing supply channels or switching to alternative suppliers," the ministry said.

The ministry recalled that it has sent proposals to the Economic Development Ministry to temporarily eliminate import duties on a number of ingredients for production of chocolate and baby food.

At the end of last week, the Council of the Eurasian Economic Commission (EEC) decided to exempt food products and goods used in their production from import duties for six months. "The decision, among other things, applies to animal and dairy products, vegetables, sunflower seeds, juices, sugars, cocoa powder, amino acids, starches, ferments and other food products," the EEC trade department said.

The proposal to temporarily eliminate duties on a number of goods imported into the Eurasian Economic Union (EAEU) and consideration of this issue by the EEC was approved on March 10 at a meeting of the Russian subcommittee for customs tariff and non-tariff regulation and protective measures in foreign trade.

The Agriculture Ministry also recalled that a ban on sugar exports and a tariff preference for imports of sugar and raw sugar in the amount of 300,000 tonnes are in effect until August 31.

"The measures being taken will facilitate the stabilization of the price situation on the domestic market," the ministry said.

Izvestia reported on Tuesday that food giant Nestle had notified retail chains on March 15 that prices will be going up as of April 1. Prices will increase by up to 40% for Nescafe coffee and coffee beverages; up to 30% for Dolce Gusto and Starbucks products; up to 20-30% for Gerber, Nan Optipro and Nestogen baby food; 20-25% for Nesquik cocoa and beverages; 20-30% for Cini Minis, Fitness and Kosmostars breakfast cereals; and up to 25% for all chocolate products.

Coca-Cola and PepsiCo announced similar price hikes earlier, the paper said.