Egg prices in Russia rose dramatically this fall, affected by the overall economic situation in the country. In particular, as poultry farmers explain, their costs are growing along with the [US dollar] exchange rate.
According to the latest data from Rosstat and the Central Bank, a sharp hike in egg prices was observed in November (0.6% in two weeks, which means about 10% annual inflation). This was the highest acceleration since last spring, comments Artyom Deyev, head of analytics at AMarkets.
Rosstat reports prices rising across the board, including most food items and services. This means Russia has to brace for a mounting inflation because there are no factors for a reversal of this growth, the expert warns.
Firstly, every industry in the country relies on imports to varying extents. In farming, imports include the breeding stock of pigs and cows, hatching eggs for poultry meat production, veterinary drugs, feed additives, pesticides and fertilizers for growing grain, machinery and spare parts, etc.
“Therefore, the weakening of the ruble will automatically send production costs further up. This trend will continue even though the ruble has somewhat strengthened lately,” Artyom Deyev predicts.
Secondly, fuel prices went up after Russia lifted restrictions on gasoline exports earlier this month; this, too, increased operational costs, in addition to the already expensive logistics (manufacturers having to use other importers of spare parts and other necessary components to replace European ones). Companies are also increasing wages and salaries to address personnel shortages, which are being recorded in the transportation sector, in retail, and agriculture.
“These are just a few reasons why prices will continue to rise affecting the widest possible range of goods, from food to electronics and cars,” the analyst concludes.