RUSSIA-FOOD PRICES INCREASE.
Food prices have grown by 2% since the start of the year in Russia, upper house of parliament speaker Sergei Mironov told deputies, urging measures to control the retail sector in the way that would prevent depletion of supplies due to chaotic purchasing, and further rise of retailing margins. Imported foods and ingredients are expected to rise by 20% in price over the year, adding to the 2008 rise, which was estimated in Moscow at 15.2%. Bread prices have risen by 20%, meat by 22%, pulses by 29% and pasta by 40%, even potato prices grew by 14%.
According to recent polls, over 71% of Russian households started buying cheaper food stuffs and supplies, the tendency particularly acute in smaller towns and rural areas. This is worrying for those who remember the massive food deficits of the early 1990s, when people hoarded fooden masse. The main concern, however, is that the lack of material improvement may work against the government, whose power and authority has rested on proving continued economic growth in 2008 in exchange for the limitation of civil liberties. If the authorities resort to remedying the problem by over-regulating the retail sector, they will be shooting themselves in the foot, however, as the experience of the 1990s has shown.