Drawn farming zone – Newspaper Kommersant No. 47 (7492) dated 03/21/2023

Difficulties with the rice harvest in the Krasnodar Territory due to an accident at the Fedorovsky hydroelectric complex in 2022 can lead to a price increase of 10-30%. Manufacturers have already notified the network about this. Retailers are in no hurry to accept the price increase due to risks to demand, while experts and the regulator point to the adequacy of the rice crop for the domestic market.

Producers of rice groats notified retail chains of price increases due to problems with the harvest, a Kommersant source among suppliers told Kommersant. According to him, unfavorable conditions in the Krasnodar Territory, where the bulk of rice is grown in the country, have led to a decrease in the quality of raw materials. And a large percentage of rice culling leads to an increase in the cost of cereals, says a Kommersant source.

Lenta confirmed to Kommersant that they had received notifications of a 15-30% increase in prices for rice groats, depending on the manufacturer. “Applications are pending as we are not ready to broadcast the price increase to the consumer. We expect the situation on the market to stabilize,” says a Lenta representative. A Kommersant source in another network said that two producers had notified an increase in prices for rice groats from March 27 by 8-19%. Decisions to revise prices have not yet been made, he said. The interlocutor of Kommersant in another large network confirmed that all the major players in the market announced price increases due to problems with the rice harvest. “Given the demand for rice cereals, chains are doing their best to keep shelf prices down,” he says. Receipt of notifications about an increase in prices for cereals by at least 10%, citing a crop failure, was also confirmed by the fourth source of Kommersant in retail.

According to Rusprodsoyuz, as of mid-March, first-class rice groats in wholesale cost an average of 64.13 thousand rubles. per ton against 51.6 thousand rubles. a year earlier and 63.7 thousand rubles. in February. According to a Kommersant source among producers, rising prices may lead to a decrease in demand for Russian rice and a switch of some consumers to buckwheat, which remains more affordable. According to Rosstat, in February 2022, retail rice cost an average of 108.8 rubles. per 1 kg, buckwheat – 100.1 rubles. for 1 kg. In large producers of cereals “Mistral Trading” and “AFG National” “Kommersant” did not answer.

In the spring of 2022, an accident occurred at the Fedorovsky hydroelectric complex in the Krasnodar Territory, which provided moisture to most of the region’s rice fields. According to the estimates of the National Rice Union, the area of ​​rice fields in the region has decreased from 119 thousand to 92 thousand hectares, and the gross harvest of rice has decreased by 24%, to 650 thousand tons.

Mikhail Radchenko, executive director of the National Rice Union, says that due to late harvesting, the quality of the current rice crop is slightly worse than last year, which may affect the production of cereals. But given the current ban on the export of rice from Russia, there are enough reserves to supply the domestic market and there are no prerequisites for an increase in wholesale prices, he points out. According to him, in the next week the union expects a decrease in wholesale prices for rice.

Irina Glazunova, deputy general director of the Institute for Agricultural Market Studies, says that in the past few months there has been an increase in prices for rice producers and wholesale suppliers due to the rise in price of raw rice. But today, most likely, the price increase has exhausted itself, she believes. According to the expert, the final data of Rosstat, released the other day, showed the gross rice harvest in 2022 at 923 thousand tons against 1.07 million tons a year earlier, and preliminary estimates were 798 thousand tons. Cereal production in 2022 reached a record 529 thousand tons, so the market saturation remains high, says Irina Glazunova.

Marat Ibragimov, a senior analyst at Gazprombank, notes that if all major producers announce price increases, the reasons may be objective. According to him, in such conditions, retail chains are interested in keeping retail prices as long as possible in order to prevent a sharp increase in the cost of products on the shelf, which threatens to reduce sales of other goods.

The Ministry of Agriculture told Kommersant that the quality of rice and the volume of the 2022 harvest fully meet the needs of Russian processors, and prices for raw materials and cereals are stable and there are no grounds for their growth this season. In-kind rice sales declined 0.6% in the year to February, while cash sales rose 23.9% yoy, according to NielsenIQ data.

Anatoly Kostyrev