From
a fairly dubious source for stories about Russia. I would prefer to
see what people on the ground in Moscow are saying.
What is beyond contention, however, is that America and the West is waging economic war against Russia.
What is equally true is that this is not the Soviet Union - something that may be a negative as well as a positive.
I would appreciate comment from anyone in Russia.
I would appreciate comment from anyone in Russia.
Food
Prices Surge As Panicked Russians Empty Their Bank Machines Of Cash
12
December, 2014
Inflation
is rampant in Russia, and the collapsing value of the ruble has
triggered panic-buying and food-hoarding among ordinary Russians.
Food
prices in Russia will have shot up by 25% over 2014 as Russians’
confidence in their country’s future starts to evaporate, according
to the Association of Retail Companies (ACORT).
The
prices are reacting to preemptive food hoarding by worried
Russians, our sources say. It’s not that there’s an actual
shortage of food. Rather, the price of food is so unstable that
Russians are worried that their neighbours are going to start
hoarding it — so they’re hoarding it first.
One
Muscovite told Business Insider that ATMs in the city are being
routinely emptied by people eager to withdraw as much cash as they
can, either to change into dollars or purchase goods with before the
ruble’s value falls even further. He said the mood there is unlike
anything he had ever seen, “including during the crash of 2008-9″.
The
prices of pork and sugar have risen by 25%, while the price of fish
and seafood has also leapt up by more than 15%, according
to Russian newspaper Nezavisimaya Gazeta.
The
latest data from the official Russian statistics service Rosstat
shows that in the first week in December the price of Russian staples
continued to rise. Buckwheat leapt up by 5.7% while eggs,
tomatoes, cucumbers, and cabbages rose by between 4.3 and 6.2% over
seven days.
Food
prices are helping to drive headline inflation in the country even
higher, hitting 9.4% last month according
to the Russian central bank.
While
the press has been focused on a leap in Russian purchases of high-end
cars — a not-terribly-surprising trend considering that the falling
ruble effectively allows rich Russians with large stacks of dollars
to purchase them at a discount — it has overlooked the real story:
Buckwheat.
Buckwheat
is something of a leading indicator of Russian consumer sentiment.
The grain is used to make bread, porridge, pancakes, and local
delicacy cutlets. Fears over the future can (and have) resulted in
panic buying. Indeed, such is the concern that the Russian state has
frequently considered building up strategic
buckwheat reserves to
try to mitigate acute shortages.
Yet
these efforts have not been sufficient to hold down the price of the
commodity, which rocketed by 65% this year.
And
it’s having a massive impact on Russians’ confidence in the
future. A study
conducted by VTsIOM in late November found
that only 51% of those surveyed felt confident in the future,
compared to 58% in the third quarter of the year and 61% between
April and June. Around 7% of respondents said that they could no
longer tolerate the situation.
Falling
confidence and sharply rising prices of staples could be a worrying
sign that Russians are losing faith in the authorities’ ability to
protect the value of the currency. The central bank hiked interest
rates again on Thursday by 1%, following a 1.5% increase at the end
of October as it seeks to halt further ruble falls. However,
following the announcement, the ruble shifted lower again, with $US1
now buying just under 56 rubles compared to 33 at the start of the
year.
The
price rises are predominantly being driven by a 40% collapse in the
ruble, according to ACORT Executive Director Andrey Karpov.
Russia imports a significant amount of its food from abroad and this
has become much more expensive due to a combination of the falling
ruble and tit-for-tat sanctions imposed by the Russian government
against imports from the European Union.
In
2013, Russia imported $US6.7 billion (£4.3 billion) worth of meat
and meat products in total, with more
than 20% purchased from countries now on the blacklist.
With
no end in sight to the sanctions and inflation continuing to rise, it
seems the Russian consumer is set to be squeezed even more over the
next few months. If sentiment on the street turns even more against
the ruble, the central bank may have a much harder task on its hands
than it currently expects.
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