In Europe, shock prices, but here? Experts told whether we will spend more in stores

The world is experiencing an unprecedented increase in the cost of food. In Belarus, there is no shock jump in food prices, but they are gradually becoming more expensive. What will happen next? Our experts speak.

External shock

Vitaly Demirov, an analyst at the Belarusian Institute for Strategic Studies, links the growth in demand worldwide for products to several reasons. The main one is purely economic.

The issuance of reserve currencies and the subsequent increase in world inflation led to a consistent increase in the discount rates of emerging economies.

The cost of borrowed funds and the most significant "long" money for economic growth has grown. Enterprises are forced to include loans taken into the cost of their products.

Another important reason for the jump in prices is the energy crisis. The increase in the cost of gas, including in Europe, has affected the increase in the price of production of units and components, imported machinery, equipment, which are bought by enterprises in agricultural and other industries. Accordingly, the cost of goods produced by them has also increased.

Influence on the increase in the price of products and lockdowns, as well as sanctions restrictions.

- We are talking about sanctions in trade not only against Belarus, - the analyst emphasizes. - First of all, we are talking about CHINA, which has fallen into the trap of a food and energy crisis. Transportation costs and commercial risks are growing, which are also included in the price of goods.

Vitaly Demirov

At the same time, an interesting situation is observed with the cost of products: raw materials are becoming more expensive faster than semi-finished products. The fact is that in the production chain of the latter there are more opportunities to reduce the margin, and hence the price.

- In developing countries, which include Belarus, people usually buy "raw" goods, while in developed countries they buy semi-finished products, which are cheaper, - Vitaly Demirov specifies.

The HEAD of the Department of Logistics and Pricing Policy of the Belarusian State Economic University, Candidate of Economic Sciences, Associate Professor Olga Erchak names another global problem that provokes price increases - the container crisis:

- Its main reason is that China's factories did not work during the pandemic, and the European Union, the United States , RUSSIA and Belarus were waiting for the delivery of inexpensive goods from China to begin . And finally, this summer, Chinese enterprises restored production and began to import products - by sea and by rail. In the largest consumer countries - the EU states, the usa and China itself - a container crisis broke out. The freight cost of the most popular 40-foot trucks, in which cargo is transported, has increased by 1.5-4 times. The shortage of containers on the world market will definitely affect Belarusians: prices for a number of popular goods, including clothes and shoes, will rise.

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Vitaly Demirov also notes that our country will not be able to fully protect itself from the effects of foreign markets. Even despite the current resolution of the Council of Ministers No. 100 of February 23, 2021 in Belarus on curbing prices for socially significant goods and the fact that we produce them in sufficient quantities.

- The fact is that our country has an open economy with a fairly high share of foreign trade in GDP. Therefore, external price shocks reach us. More expensive imported equipment, raw materials, seeds, packaging and consumer goods. Take, for example, feed prices in September this year compared to September last: the price of feed corn increased by more than 130%, wheat - by 115%, rapeseed oil - 2.2 times. Obviously, this cannot but affect the cost of final food products, - the expert explains.

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Will resolution #100 help?

The fact that there was no shock price increase in Belarus, the chairman of the Standing Committee on Economic Policy of the House of Representatives of the National Assembly of the Republic of Belarus, Leonid Brich, largely connects with the famous resolution of the Council of Ministers No. 100:

- According to it, prices cannot increase by more than 0.2% per month. Therefore, in our country, the cost of socially significant goods has increased within the limits of inflation. We have not entered the framework of its forecast indicators for the year: they were planned at the level of 5.5%, but most likely will be around 9%. Therefore, we see that the current increase in seasonal price fluctuations for a number of vegetables, such as potatoes and cabbage, is slightly higher than last year. But it is insignificant compared to Western countries.

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Olga Erchak also believes that it was the current set of legislative acts that helped keep the cost of goods at an acceptable level:

- The state can set and regulate prices for a whole list of socially significant goods, which includes eggs, butter, FLOUR, bread and other products, for up to 90 days. If necessary, extend this decision. Just in September, MART extended the effect of such restrictions: the maximum trade allowances amounted to 30%, and, for example, for sausages - up to 20%, for MILK- up to 15. The store gives the buyer the right to choose. You can buy "fresh potatoes", the price of which does not exceed 30%, or "washed potatoes" in a package - at a free price, which means a higher price. After all, the country has a system of free and regulated prices. It makes it possible to reduce the "appetites" of sellers and limit their allowances, and when there are a lot of such goods, remove restrictions. When we come to the store, we usually notice only high prices, but in fact it is not difficult to find those foodstuffs, the cost of which is limited by the state. You just need to examine the shelves with the goods. For example, ordinary cottage cheese is a socially regulated product, while grained cottage cheese with cream is not. The buyer has a choice.

Vitaly Demirov believes that limiting the cost of socially significant goods is effective in crisis situations. But it will be difficult to keep prices down for long.

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- Stores will try to make up for the difference in prices for such goods at the expense of higher prices for others, as well as reducing the quality and volume of goods sold for the same price. What should the state do in such a situation? It is possible and necessary to contain the rise in prices to a certain extent. At the same time, it is necessary to take into account that, according to MART, manufacturers and suppliers do not always play by the rules. Some will try to translate the reduction in the cost of the tax burden into an increase in profits. In addition, the main impetus for rising food prices lies not in the plane of the wholesale selling price, but in the plane of the retail price. As a rule, low EXPORT prices hold back the retail sale of food products in our stores, and if export prices are high, it makes no sense to provide discounts on the domestic market. In this way, reducing the tax burden on food producers will to some extent smooth out price increases only if end-to-end control is implemented - up to the sale of the final product. Ideally, none of these tax-supported products should be sold on a foreign market. The widespread introduction of digital traceability systems in the domestic market, coupled with the right economic decisions, can help overcome the acute phase of the food crisis.

I see one of the important ways to reduce the tax burden for our manufacturer and seller - taking into account the costs that they both bear.

Tamara MARKINA,

newspaper.