A high grain harvest has been harvested in Russia, but bread is becoming more expensive: why

Expert Uzun: “The reasons must be sought not in the grain, but in other ingredients used in cooking”

It looks like Russia is coping with its grain exports quite confidently even without a grain deal. So successful that our fellow citizens even have doubts: if we sell our bread abroad, what will we be left with ourselves? In social networks, forecasts are flashing that by the end of the year our daily bread may rise in price by 7-10%. It turns out that with any abundance of raw materials, we are not immune from a rise in price.

In August, Russia, compared to the same period last year, increased export supplies of grain by 27%, shipping 6.4 million tons. According to the Russian Grain Union, shipments of wheat increased by 29%, barley by 15%, and corn by 60%.

Demand for Russian wheat in the world is consistently high. Egypt is among the leaders in purchasing our new (and still partly the remnants of the old) crop. It is followed by Algeria, which purchased from us 6 times more than in previous years. And an honorable third place is occupied by Turkey, although it has significantly, by 43%, reduced the volume of purchases.

As Moscow promised at the beginning of this agricultural year, large volumes were delivered to the poor countries of Africa. In particular, shipments to Kenya increased by 9 times, to Sudan by 2.5 times. The states of Latin America are not forgotten and not abandoned: Mexico, Venezuela, Peru… But most of all Russian bread is loved in Bangladesh: purchases there have increased 47 times!

However, the fears of Russians that with a high grain harvest and success in exporting bread may rise in price are not without foundation. According to experts, producers (peasants) will gather a noble grain harvest this year. Less than last year’s record (158 million tons), but still high, about 137 million. But the “weak link” is the baking industry, which consumes flour that has recently risen in price by 15-18%. Transportation costs for the delivery of flour also increased and for the first time in the history of modern bread baking, they exceeded the cost of the product itself. If we arithmetically calculate the increase in all production costs, it turns out that bread should rise in price by 10 percent.

But it’s still half the trouble. Bakers complain that they lack premium flour that meets their industry standards. Most likely, you will have to bake rolls from other varieties, simpler. It is possible that the more expensive bread will not be of the best quality. How is it to be understood where the first-class flour has gone?

Analysts suggest that it most likely began to be widely used in the production of pasta. Which is actually good, because not the grain itself, but the final product (pasta) gives the maximum added value. And we can only be glad for our processing industry.

True, Vasily Uzun, Doctor of Economics, Chief Researcher at the RANEPA Center for Agricultural Policy, believes that it is too early for us to rejoice. “We are getting high grain yields, which is good. We increased the export of flour – before we supplied only grain. But, unfortunately, we have not yet reached pasta, it is necessary to invest very large funds in their production. And Russia, a great grain power, needs to compete with other countries primarily in the export of final food products. Selling grain without processing is the same as selling crude oil.”

– How justified is it that bread, albeit a little, but rises in price?

– The reasons for the rise in price should be sought not in grain, but in other ingredients used in cooking, and the costs of which are growing. In the structure of the cost of bread, wheat takes no more than 20%.

– Can success in grain exports be explained by Russia’s withdrawal from the “grain deal”?

– In my opinion, the main thing here is not the volume of supplies, but discounts, discounts on goods, which we used a year ago. Approximately $50 per ton. Today we deliver directly and there are no such losses. And prices in the world market are quite stable and high.

– Do domestic grain growers complain about prices? Last year they were very low, averaging 10,000 rubles per ton. Some growers have even switched to other crops…

– Compared to last year, the prices are higher, but the grain growers complain, asking to abolish the export duty altogether. Funds for its payment go to the budget and must be returned to producers in the form of subsidies. However, this return is only 10-15% of the total.