Agro Perspectiva

Russian Ban on Grain: Bread is Going to Be 20% More Expensive

18.08.2010 12:59 "Agro Perspectiva" (Kyiv) — The price of the bread and other bakery products will rise in the future — or, at least, that is what the managing director of the Estonian Association of Bakeries, Arnold Kimber, believes. The organization explained from the pages of its web site that during the last four years regardless of the increase of the fuel and electricity, as well as the surge in VAT rate, the prices stayed the same just because a cut in the labor costs. Kimber is also quoted saying that the future and probable increase in the price of the flour will not left other option for the bakeries than raise the prices. Estonian Association of Bakeries estimates that the value of the bread will grow from 10 to 20% of the currently price. The future growth comes to confirm the fears that the Estonian Chamber of Agriculture and Commerce President Roomet Sõrmus who said that Russia’s recent decision to temporarily suspend grain exports will probably impact national farmers and consumers, as he told on Kuku Radio and was reported by the Estonian national broadcasting. Despite the fact that the growth will not be perceived as beneficial measure by the consumers, the managing director also said that there is something positive in the increase as it will help the national producers. «The price growth will guarantee that the tradition will be maintained» he said. Estonia produces more than 80 tons of about 70 different varieties of rye bread, points out the association The Estonian association of Bakeries is a nonprofit organization that aims to represent the companies engaged the baking industry in the country and it was funded in Tallinn back in 1989. Fires in Russia are having international consequences. Russian government decided in fact to opt for a ban on grain exports until the end of the year seeing in such a measure an antidote to keep the prices steady and under control at least within the Russian borders. However, the BBC correspondent in Moscow reported that there are big increases in the price of flour around the country: in the Russian capitol city bread is already more expensive then before — some shops registered already a 20% increase with lots of complaints by local people. According to the first information given by Russian officials while some wildfires are still burning, the grain harvest is already at least a third less than last year.Some international correspondents in Russia said that the ban is also motivated for other reasons despite the economics. Traditionally, Russians eat bread with everything and an increase in the prices due to a grain shortage could lead to the population general dissatisfaction and popular clashes with the power, as it has happened in the past history of Russia.