Sugar prices in Russia will be “unfrozen” on June 1

If closer to the summer in Russia vegetables begin to become cheaper, then sugar, which “goes out of step”, on the contrary, becomes more expensive. Such is our tradition. The Russians are a scientific people, they are preparing for the autumn conservation of vegetables, but you can’t stock up on sugar for this period. To fully meet the season of jams and pickles, the sweet product is bought in advance. And, by the way, they are right. June 1 ends the government “freeze” of sugar prices. What will happen to the price tags on the shelves next?

Prices for sweet sand, by the way, are already slowly “defrosting” today. According to Rosstat, from the beginning of the year to mid-May, they grew by 3.8%. Moreover, about a third of this increase has occurred since May 10, literally in a matter of days.

Wholesalers and retailers are at a low start, the change of price tags is about to begin. Now a ceiling has been installed on them both in the wholesale link and in retail.

Prices for granulated sugar depend on many factors – the remoteness of the sugar factories, the cost of transportation and logistics, the level of demand… For obvious reasons, the last factor is decisive.

– I need 25 kilograms of sugar for a family of five people in the fall, – says a housewife with a five-kilogram package just bought in her hands. – It takes 400 grams per 3-liter jar for compotes, one to one for jams. Let’s say 3 kilos of berries means the same amount of sugar. And twist cucumbers with tomatoes …

What will happen if prices are unfrozen and allowed to float freely? We all remember how they “floated” in 2020, when growth happened as much as 72.7%. In December of the same year, they even “sailed” to Vladimir Putin, who introduced the procedure for regulating prices (restrictions) for this product with their rapid growth.

The manager of the supermarket, where my dialogue with the customer took place, said that he did not know anything about any rise in the price of sugar. “We have ten days to spare,” he said. “And prices will rise if wholesalers raise them.”

Some experts predict the future rise in sugar prices within the limits of inflation. But what are these limits? In annual terms, in April, it slowed down, according to Rosstat, to 2.3%. But then it starts to accelerate again. Financial departments expect up to 5-6%, independent experts – up to 7-10%. Optimists motivate their position by the fact that the sugar beet harvest last autumn was a record one, sugar production exceeded 6 million tons – with domestic demand of 5.8 million. There are even small surpluses for its export. Where, with such an abundance, can a rise in prices arise? In addition, they add, the country has a mechanism for purchasing and commodity interventions for sugar. On the one hand, to stabilize prices in stores, their availability for customers, and on the other hand, in order to support domestic agricultural producers. Based on such facts, analysts predict that the rise in prices will be very small.

But, as they say, the legend is fresh, but hard to believe. In 2022, Russia also had an intervention fund for sugar. And the sugar beet harvest in 2021, in relation to 2020, was also a record. But this did not save us from its shortage in the early spring of last year, when restrictions on the sale of one hand were introduced and when prices grew by leaps and bounds. Although they, as now, were also fixed. But every now and then they broke through the “deaf defense”. The Federal Antimonopoly Service was even forced to arrange raids and checks in stores, to identify unreasonable price increases.

Of course, we do not claim that last year’s story will be exactly the same with sugar. But it cannot be ruled out. Indeed, starting from 2020, during the period of demand, it is almost the main driver of price growth in our product line. And no “freeze” from rising sugar prices will save us.

Today, such a tough price, as set by the government – 45 rubles per kilogram – you will not find in stores. But on the shelves, at least for now, there are kilo packages of 50-60 rubles each, choose according to your taste. This is not 114 rubles for extra sugar and not 193 rubles for cane sugar, as it was a year ago …

How long has this balance been established? Let’s take into account one more factor that matters. Against the backdrop of declining supplies from India, Brazil, Pakistan and Thailand, world sugar prices are rising at a record high, today they are at a maximum over the past 10 years. And although our country is in no way dependent on sugar supplies from outside, when did it happen that prices for some products in Russia did not reach world prices?