"Izvestia": Ministry of Agriculture reported on the risk of rising prices of dairy products

The Ministry of Agriculture reported in the report to the government on the possible rise in prices of dairy products, the Izvestia newspaper reported with reference to the document signed by Deputy Minister Oksana Lut. The publication reports that dairy products is the only category of food, listed in the report, about the risk of rising prices of which the Ministry of Agriculture warned. The ministry linked the forecast to rising production costs and the cost of labeling products. "With regard to the growth of production costs, as well as additional costs of enterprises due to the introduction of mandatory labeling of dairy products with a shelf life of over 40 days from September 1, 2021, there may be a delayed economically justified price increase for dairy products," the newspaper quotes the producer price report as of October 27. The expected amount of price rises is not specified. Apart from dairy products the Ministry of Agriculture reported on the prices of sugar, sunflower oil, grains, bread, flour, pasta, meat, eggs, fish and vegetables. Lenta" stores have begun to receive notices from suppliers to raise the purchase price of dairy products up to 5% from December 1, they have already grown by nearly 10-15% YTD, representatives of the retailer told "Izvestia". The service "Utkonos Online" also notified about the price increase. Since September 1 the dairy industry is subject to a system of digital labeling, which is operated by the Center for the Development of Prospective Technologies (CDPT, brand "Honest Sign"). According to its rules, producers must put codes in Data Matrix format on the packaging and enter the data into the system. At the end of 2020, the Research Financial Institute of the Ministry of Finance argued that labeling would not lead to higher prices. The CRPT stated that marking does not have a negative impact on product prices, and investments in the integration of the marking system, together with equipment for small businesses, start at 10-15 thousand rubles. According to calculations of the Higher School of Economics, the cost of dairy products labeled grows more slowly than those products which are not yet marked, according to the CRPT. According to the data, provided by CRPT, cheese, which is marked on June 1, rose in price by 0.19% on average per week, unlike cottage cheese (0.3%), pasteurized milk (0.31%) and sour cream (0.36%). At the same time, the CRPT continues, the raw milk price rose by an average of 0.48% per week in September - October and by 4.2% YTD. Prices are primarily affected by an increase in the cost of raw materials, production packaging, veterinary drugs, electricity tariffs, as well as lower feed yields and exchange rates, CRPT indicates.