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August 15 – August 21, 2011

Basic foodstuffs prices rise

The situation has not changed
Basic foodstuffs prices rise

In Belarus, marginal cost prices for bread, dairy products and meat increased by 5%. The consumer price index for goods and services in July this year compared with December 2010 increased by 41%.

Alignment of the Belarusian prices for basic foodstuffs with the Russian is a must, believes the Chairman of the State Control Committee of Belarus Alexander Jacobson. In the neighboring Russia and Ukraine the prices for dairy and meat products are several times higher than in Belarus.

Comment

Growing food prices are inevitable to ensure the break-even of meat, dairy and bakery industries and to avoid shortage of these goods in the shops of Belarus. Enterprises work at a loss with restricted prices for end products and become unprofitable. As a result, the variety in the shops of Belarus is gradually becoming smaller. There is a shortage of some goods inter alia in Minsk (in the regions empty shelves in the shops are quite common). At the same time, the price disparity with the neighboring countries, stimulates grey exports, which is difficult to deal with (it is impossible to inspect virtually very suitcase), as well, mass export of goods to Russia, which is difficult to fight against given the non-existent borders. In the current economic circumstances the government should raise prices and tariffs while focusing on addressed assistance to the population. However there is neither political will nor administrative (labour) resources to implement such economic policy. Therefore, it is likely that the existing practice of gradual increases of prices will continue for the disadvantage of both, producers and consumers, (the latter affected by rising prices almost weekly).

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