QUICK RESPONSE TO RISING PRICES OF BASIC FOOD

In early December, there was a sharp jump in prices for basic food. So, according to the Prosecutor General's Office, sugar rose by + 71.5%, sunflower oil by + 23.8%, flour by 12.9%, bread by 6.3%. Prices for traditional products went up to the New Year's table. This disappointing situation in the food market provoked a harsh reaction from the President.

At the moment, the following steps are known to stabilize the situation with prices for basic food:

• The Prosecutor General's Office has started checking.

• Prime Minister Mikhail Mishustin signed a decree to increase the export duty on sunflower from 6.5% to 30% of the customs value of exported products (at least 165 euros per 1 ton). It is assumed that this should restrain the rise in prices and processing products, as well as reduce export volumes. The measure is set for the period from January 9 to June 30, 2021.

• Following the results of December, it will be decided to introduce an export duty on sunflower oil

• Grain export quota may be supplemented by export duty on wheat

• Prime Minister Mikhail Mishustin instructed the Ministry of Economic Development and the Ministry of Agriculture to submit draft regulations to the government by December 14 to stop price increases. According to TASS, in addition to export containment measures, the government may impose a limit on the cost of sugar and sunflower oil. According to some reports, Deputy Prime Minister Andrei Belousov was advised to adhere to the sugar price of no more than 36 rubles/kg in wholesale and 45 rubles/kg in retail, sunflower oil - 95 rubles/kg and 110 rubles/kg, respectively.

Whether the increase in prices for basic food will stop will be known soon, so sunflower oil producers are already ready to lower prices without waiting for an increase in sunflower export duties. This was reported to Interfax by the director of the Maslozhirovoy Union Mikhail Maltsev.

In turn, we would like to draw the attention of our partners to FIBER PROFIBER (food fibres), which is made from Russian wheat. It is likely that the price situation will directly affect its selling value.