Experts: the prices for bread in Russia in 2016 could rise by 10-15%

Experts: the prices for bread in Russia in 2016 could rise by 10-15%

MOSCOW, 4 February. /Corr. Natalia Novopashina/. Bread in Russia because of the growth of the dollar and the producers ‘ costs in 2016 could go up by 5-10%, and more pessimistic forecast of 15% compared to the year 2015. This opinion was expressed by the interviewed experts. More expensive raw materials and an increase in the cost of imported equipment is forcing manufacturers to think about the increase in selling prices. After them the prices may rise in retail.

The accumulated costs

One of the first this year about the need to raise procurement prices for the bread wonder bakeries of St. Petersburg. According to the Association of bakers of the Northern capital, in General for 2015 rising costs in the sector amounted to 15% and the same figure is necessary to raise prices.

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“Inflation continues to grow. If you gradually increase prices in the quarter the growth will be 2-3%. But if the year is not to take price increases – it accumulates. For 2015 “accumulated” 15%”, explains the President of the Association Alexander Zorin. First, producers find it necessary to raise the prices of so-called “social” varieties, which include, for example, threaded baton, – increase in selling prices can be 15%. “There are products that are almost unprofitable, they today are sold at a loss. This social varieties of bakery products. They are up to 50% of the volume (production) occupy the factories,” said Zorin. Less significantly – by 10% – it is proposed to raise the price more cost-effective, slozhnosochinennye varieties.

According to Zorina, the last time the manufacturers raised their prices a year ago – in February 2015. But it was “deferred” the price increase 2014. “And the same thing is happening. This is due to the increase in costs for 2015,” he says. The increase in costs of the organization explain the rise in the dollar and rising prices for services of natural monopolies, commercial expenses (including product returns), the increase in the salaries of employees of the enterprises by 8%.

As a result, in retail bread prices also could rise by 10-15%, suggests the head of Association of bakers St. Petersburg. Last year, trade raised their prices synchronously with manufacturers at 15-16%, he said.

Member of the management Board of the Russian Union of the baking industry Alexey Lyalin said that he agreed with the figures, announced by the St. Petersburg bakers. “This (the planned price rise – approx. ed.) is in the range of inflation, which gives us for 2016 the economic development Ministry. If they did not raise rates in 2015 – perhaps this is a reasonable position, these are verified figures,” he said.

Raw materials as a factor of rise in price

Russian Guild of bakers and confectioners (Rospik) also expects the price of bread in Russia can grow. “The Guild’s estimates, in 2016 the growth of bread prices for the population will be 8-15%,” – said the President of the organization Yury Katsnelson. According to him, 40% in the structure of bread prices from the manufacturer are raw materials.

“The main driver of cost increase in the production of bread will be the cost of flour and other raw materials (yeast, sugar, vegetable oil)”, – said the head of the Guild. He also added that the increase in the cost of imported components and spare parts to the equipment by 20-30% may result in a rise in price of the final product by 0.4-0.6%. Finally, the increase in wages of bakers 8-10% raises the price of bread, respectively, 0.7 to 0.9%, said Katsnelson. As adds Lyalin, the remoteness of the production of bread from the centers of production of raw materials and packaging is another factor of rising prices.

The possibility of growth of price of bread confirm and in other industry organizations – the Institute for agricultural market studies (IKAR). However, there note that explicit dependencies between the prices of bread and basic raw materials – flour – no.

“The close dependence of the price of bread on the dynamics of the flours was observed. Almost every season there is a noticeable seasonal decline in prices for flour. The average consumer price of bread continues to grow,” says Deputy General Director of IKAR Irina Glazunov. However, she notes that at the same time increases the cost of other inputs in the production of bread. “Other costs for the production of bread, as a rule, not decreasing, and steadily grow, including other food ingredients, fuel and electricity, packaging, transportation and so forth,” – said the expert.

According to the forecasts of Icarus, the consumer price of bread in 2016 may increase by 10%. Such dynamics will correspond to the price growth in 2015. As noted in the Institute, citing data from Rosstat, in December 2015 the bread from wheat flour compared with December 2014 increased in price by 10.2%.

Careful retail

The retailers careful in the estimates of possible growth of prices for bread this year. Chairman of the Board of the Russian Association of experts of the retail market (RERR) Andrey Karpov believes the figure is 15% overvalued and believes that such dynamics of growth of prices is possible only in high price segment.

“If to speak about some average price of bread, it is potentially possible – there will be new proposals for more expensive bread. In the lower price segment we are unlikely to see such a rise in price”, – said Karpov. According to him, prices for bread will either remain the same, or they will rise to a maximum of 5% per year.

The head of the ACORT Presidium Ilya Lomakin-Rumyantsev chose not to make forecasts on the possible increase of bread prices. “A year wouldn’t like to make predictions, we are, unfortunately, may trigger the growth, and we seriously treat key priority formulated by the government not to allow unreasonable growth of prices,” he said.