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Russia to Increase Butter Purchases to Lower Shelf Prices
Oil prices are rising, the Ministry of Agriculture admitted. The department believes that increased imports will saturate the domestic market and stabilize the price situation.
Russia will increase purchases of butter from friendly countries, the Ministry of Agriculture reported. Since butter is included in the list of essential products, prices are constantly monitored and are currently rising, the department admitted. According to the Ministry of Agriculture, increased imports will saturate the domestic market and stabilize the price situation.
They added that another tool could be an agreement between the government and companies to fix the retail price of oil. Deputy Speaker of the State Duma Boris Chernyshov addressed a similar request to the Ministry of Economic Development. He sent a letter to the department with a proposal to use the mechanism for setting the maximum price for butter.
According to Rosstat, oil prices rose by 8% in August and September. Since the beginning of the year, the growth rate has reached almost 18%. Marina Petrova, founder of Petrova 5 Consulting, explains why:
As noted by the Ministry of Agriculture, the growth in prices for butter is influenced by a significant increase in the consumption of dairy products. According to the department, consumption is growing "due to the growth of household incomes, an increase in production using butter and an increase in demand from enterprises, especially in the hotel and restaurant sector."
The list of socially significant products includes 24 products. In addition to butter, it includes several types of meat, flour, salt, sugar, eggs and other products. The current rules state that if the retail price of a socially significant product increases by 10% within two months, the Cabinet of Ministers may set a maximum price for this product for a period of no more than 90 days.