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Food Gets Cheaper
Worldwide prices for basic food products are more or less stable today and the grain and sugar prices are going down. Soft wheat lowered to $279/ton yesterday on Chicago Mercantile Exchange, fitting the price corridor defined by the RF Agriculture Ministry May 12. In part, the reduction could be attributed to the efforts of exporters that have been speculating for fall since February. Anyway, the current condition of global markets give the RF government an extra chance to contain the inflation.
The prices for soft wheat sank to this year’s record $279.34/ton in Chicago yesterday. The decline reached 40.6 percent vs. February, which witnessed the peak in grain prices of $470.3/ton. Other food products manifest similar performance. The experts say the current reduction in food prices is direct consequence of the speculation-for-fall efforts of exporting nations, including Russia and the United States.
Indeed, the agricultural authorities of Russia set May 12 the price corridor for grain of new crop at $250/ton to $280/ton, projecting its amount at 85 million tons to 87 million tons vs. 81.7 million tons that Russia harvested past year. Chicago prices needed just a few days to fit the announced limits.
“The harvest of 85 million tons to 87 million tons means widening the export potential of Russia by another 5 million tons to 6 million tons,” said MZK Marketing Director Nikolay Demyanov. Russia exported 13.6 million tons past year.
“In the environment of continuous battle against the inflation and increase in food prices, the Agriculture Ministry is interested in containing the prices both on domestic and global markets of grain,” explained Sovekon Executive Director Andrei Sizov. “The term of prohibitive duties on grain import from Russia expires in June and global prices will be again directly affecting the domestic ones.” The Agriculture Ministry will have to maneuver between the export and domestic market, the expert forecasted.
www.kommersant.com
All the Article in Russian as of May 16, 2008
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