Khalil Aminov on the hype around egg prices

For Russian regulators, the question of what is more important – the egg or the chicken – is not worth it. Both products are important to them, the prices of which have risen sharply at the most inopportune moment. Ahead are long New Year’s feasts and an important electoral cycle, when all efforts are devoted to allaying Russians’ dissatisfaction with the rise in prices of basic products.

The picture was also spoiled by a number of retailers – for example, the Verny and Bristol chains, which began selling eggs individually or a limited number of packages per person. This only reinforced consumers’ belief that shortages were imminent, another reason for the rush. The events of the spring of 2022 showed that the restriction on sales of sugar – the most popular product among the population at that time – only caused a new wave of purchases for future use, although there were no objective reasons for the shortage of the product.

At the beginning of this year, nothing foreshadowed anything bad. Until May, according to Rosstat, prices for eggs decreased by an average of 1.5% per month, for chicken – by 4%. But already in the summer, some large poultry enterprises were forced to temporarily close due to an outbreak of bird flu, but demand did not go away. It even increased, since the summer marked the peak of social payments, funds from which the population began to spend, including on the most affordable protein products. By September, chicken prices had risen by 22% year-on-year, eggs by 17%, and in November by 30–40%.

The Ministry of Agriculture began to put out the fire by allowing duty-free import of 160 thousand tons of chicken. With eggs it’s more complicated: importing them into the country in large quantities is difficult due to their short shelf life, so the ministry recommended that producers sign long-term supply contracts with retailers.

Sovecon director Andrei Sizov says that in the fall, the supply of eggs on the market traditionally decreases: at this time, feed and electricity become more expensive. He predicts that eggs will rise in price by another 10–20% and that the growth will stop there. The situation will be resolved in the spring if variable costs of producers are controlled, that is, costs of fuel, electricity, and transportation, Senator Sergei Mitin promised on December 12. But it seems that this is much more difficult to do than with imported “interventions.” “According to the rules, tariffs for natural monopolies should be within the limits of inflation growth set by the Central Bank, but this does not always happen,” said the senator.

From this we can conclude that in order to stabilize prices for eggs and chicken, regulators are fighting not the cause, but the effect, involving the Prosecutor General’s Office, which has already promised to check the validity of the increase in product prices. It so happens that in our country, problems pedaled by the media are solved using their own methods – loudly and not always effectively.