If it goes on like this, it will stand like bouillabaisse
Did you know that the most expensive soup in the world is bouillabaisse imperial? The cost of a serving for two is around $ 500. Our borscht cannot yet make serious competition to the foreign first, but the day is not far off when it will cost an astronomical amount. All attempts by the authorities to slow down consumer inflation have failed. This is evidenced by Rosstat data: for the first time in 4.5 years, the indicator exceeded 6% in annual terms. Another inflationary leap occurred not because of some refined, piece goods and products, but because of the rise in prices for the components of the most banal borsch set: beets, cabbage, carrots, onions.
Rosstat has published fresh data on inflation in the country. At the end of May, in annual terms, it reached 6.02% – this figure for the first time exceeded 6% since October 2016.
The main driver of price growth in the food segment was fruit and vegetable products: the rise in price of borsch set has significantly accelerated. Statisticians record an increase in the cost of its ingredients – from 11.3% to 35.3%. And this despite the fact that in recent months the government has applied a number of measures aimed at curbing prices: subsidies to farmers, freezing prices. However, the fact remains that it has not yet been possible to stop food inflation. Experts unanimously asserted that the rise in prices could not be contained by administrative measures. And so it happened.
It is noteworthy that loud phrases have been heard in the upper echelons of power since the end of 2020 – we will stop the rise in prices. At first, according to forecasts of the Bank of Russia, the peak of inflation should have occurred in February – March 2021 and amounted to approximately 5.5%. In March, the head of the Ministry of Economic Development and Trade Maxim Reshetnikov said that prices were about to begin to decline: “At the moment we have reached the peak of inflation, we have stabilized at 5.8% a week ago.” But this indicator turned out to be not the limit. In mid-spring 2021, Elvira Nabiullina admitted that the peak of annual inflation in Russia has not yet been passed. “Now we expect the annual inflation to remain on a plateau close to the values of the first quarter until the middle of the year,” the head of the Central Bank emphasized. In general, the story with the peak is becoming more and more entertaining: inflation conquers a new peak every month. And ahead looms the next – even higher. It’s already June, and prices continue to gallop, and the authorities are unable to slow them down in any way.
Artificial freezing of the cost, as practice shows, helps only for a couple of months: prices stop growing for some products and start for others. This is understandable: retail chains want to compensate for the money lost on sugar, flour or eggs by additional price tag markings on the rest of the product range, and manufacturers do not want to keep up with the rate of general inflation in their own revenues, says Pyotr Pushkarev, chief analyst at TeleTrade.
“Price jumps will be observed throughout the year in a variety of and sometimes unexpected goods, inflation is working and gaining momentum, as it were, in a chain,” the expert says. “And if the government tried to freeze prices for a long time, it would soon run the risk of getting the effect of empty Soviet shelves.”
Since the end of spring, the authorities have begun to use new methods of dealing with rising prices. For example, to distribute preferential subsidies at a minimum percentage for farmers. At the same time, the borders were closed with duties and quotas for excess exports. They started talking about creating intervention funds – for example, for sugar. But there is still no positive effect from these methods of price braking.
As for the cost of the borsch set itself, now on the shelves beets and carrots are still of the old harvest. A scarce product, one might say, is also expensive. “Now a new agricultural season has begun – the new year’s products are already arriving in stores and prices will begin to decline,” Artem Deev, head of the analytical department at Amarkets, is full of optimism.
Nevertheless, statisticians continue to record inflation growth. But the authorities, as, for example, at the just ended St. Petersburg Economic Forum, continue to convince us that by the end of the year inflation will drop to the coveted target of 4-4.3%. Why would you? Anna Vovk, the chairman of the committee of the Moscow Chamber of Commerce and Industry, believes that “we will definitely have a double-digit inflation rate.” Paradoxically, it can only be slowed down by another all-Russian misfortune – a decrease in the population’s income. After all, if people do not have money, raise prices – do not raise them, and no one can buy anything. Not for borscht, not for bouillabaisse …
Borscht for the price of bouillabaisse