The Russians bought buckwheat for future use, which cooled the growing demand for grain. This was reported to socialbites.ca at the Ministry of Industry and Trade.
“The Russian Ministry of Industry and Trade held a meeting with the Russian Ministry of Agriculture, the Russian Federal Antimonopoly Service, retail chains, industry associations and producer associations on the current situation in the consumer market. The meeting also discussed the increasing demand for a range of goods.
Participants recorded a decrease in demand compared to the previous month. Included, because the population bought food for the future. Trade networks have not announced an increased demand for buckwheat, ”the statement said.
On March 10, Maxim Shaskolsky, head of the Federal Antimonopoly Service (FAS), announced the urgent demand for buckwheat.
“(The harvest of buckwheat) is sufficient and there are enough buckwheat reserves, a lot. But there is an explosion of demand. We noted that in rush demand conditions, many popular products such as sugar and buckwheat were purchased by pallets. In this case, we control all manufacturers and suppliers, ”Shaskolsky said, answering questions from State Duma deputies (quote from Interfax).
According to Rosstat, 892 thousand tons of buckwheat were harvested in 2020, 921 thousand tons were harvested in the Russian Federation in 2021.
Waiting for it to disappear from the shelves and rise in price
The press service of the FAS “Gazeta. Ru” explained that buckwheat is a product of long-term storage, therefore, in conditions of high demand, citizens buy it in quantities much larger than necessary for daily consumption.
“However, such behavior is unreasonable. The annual consumption rate is 3.5 kg of buckwheat per person. Yury Shedko, professor at the Department of State and Municipal Management of the Financial University under the Government of the Russian Federation, at home groats are stored no more than a year (under ideal conditions, up to two years),” he said.
Oleg Moskvitin, Acting Director of the HSE Institute for Competition Policy and Market Regulation, noted that the increased demand for buckwheat is due to the unreasonable expectations of citizens that this product can either go out of sale or rise, like any other (for example, sugar). significantly in price.
“This is a common human response in difficult times. There was a similar demand during the peak of the COVID-19 pandemic. In addition, some people still bought buckwheat. Similarly, during the sanctions period in 2014, white goods and electronic goods, which were objectively surplus in the economy, were purchased in bulk, as is the case today. The excitement may be fueled by the disappearance of enough buckwheat “at the moment” when demand has significantly exceeded stocks of standard goods in stores. Or due to the rise in prices of individual players against the background of increased interest from buyers, ”said Moskvitin.
Denis Ternovsky, a leading researcher at the RANEPA Institute for Applied Economic Research (IPEI) Center for Agricultural Policy, noted that the population does not take into account a simple fact: buckwheat can also quickly become cheaper.
“For example, in 2016 the price of buckwheat rose to almost 100 rubles per kilogram, compared to 35 rubles in 2014. But by 2018 the price has dropped to 50 rubles, which is even lower than in 2014 if we take into account inflation,” he said.
panic subsided
According to Moskvitin, the main reason for the decrease in buckwheat demand is that citizens have managed to make significant stocks.
“Another thing is that the panic has subsided. Citizens see, among other things, that the state is taking active measures to stabilize the situation both in the food market and in the economy, and in the social sphere as a whole,” he said.
According to him, there is no need to mention the factors that could cause Russia to lose domestically produced buckwheat. On the contrary, the government decided to increase buckwheat cultivation in 2022. According to Ternovsky, the area under buckwheat will increase by 5.5%.
“But the high demand for grains is repeatable. if it changes again well currencies – as a reaction to this, ”says the professor of the basic department of trade policy at the Russian University of Economics. G. V. Plekhanov Vyacheslav Cheglov.
Prices will stop rising
Now a pack of buckwheat in stores costs from 89 to 200 rubles. Groats prices rose 2.9% during the week, according to Rosstat.
In large retail chains – Utkonos, Magnit, Pyaterochka, Verny – did not respond to socialbites.ca’s request whether to lower prices for buckwheat.
“The dynamics of buckwheat prices is cyclical. The buckwheat harvest is determined by the size of exports, the problems of agricultural producers, transport workers, processors and rush demand. In retail trade organizations, the price depends on the quality characteristics, the volume of shipment of goods and the promptness of settlements,” explained Shedko.
According to Ternovsky, the buckwheat price increase began in 2019.
“There was a natural recovery to the average after the 2017-2018 recession. But in 2020 demand, and therefore prices, has been spurred by quarantine restrictions. World and domestic prices of all grains increased in 2021. As a result, we hit the hype of spring 2022 with a high price level. At the end of March, prices were 40% higher than in the same period last year, which does not reflect the stability of the supply volume or the general level of grain prices – the rate of increase in flour and rice prices was twice lower and the price of millet did not rise at all.
According to Ternovsky’s forecasts, buckwheat prices in the near future will no longer be so high.
According to experts, the Federal Antimonopoly Service should pay more attention to buckwheat prices. “The intervention of the Federal Antimonopoly Service is necessary for the responsible behavior of manufacturers and sellers, the inadmissibility of unreasonable price increases. Including a possible increase in demand for food products and essential goods,” Shedko said.
The FAS press service explained that the agency is monitoring the situation with buckwheat prices. “In case of detection of violations of the anti-monopoly law, the ministry immediately takes measures to intervene,” the FAS said. The Ministry added that such measures have not yet been taken in the buckwheat market.