Türkiye and Azerbaijan came to the rescue
Currently, the import duty on edible eggs reaches 15% of the cost of production. The zero rate will be valid from January 1 to June 30, 2024. The subcommittee’s decision states that the new measure will help quickly stabilize the Russian food egg market and ensure an increase in supply.
According to information “Izvestia”The office of the First Deputy Chairman of the Government of the Russian Federation Andrei Belousov confirmed the signing of the relevant protocol, and the Eurasian Commission supported this initiative.
The press service of the Russian Ministry of Agriculture reported that the decision was taken to reset import duties on chicken eggs as an operational measure to saturate the domestic market, and negotiations are continuing with friendly countries to increase the supply of these products. The Federation confirmed to socialbites.ca.
“The first deliveries from Azerbaijan are expected to arrive at the end of this week, and from Turkey in the near future.
As a result, price dynamics are expected to stabilize next month,” explained the press service of the department.
RIA News He stated that Turkey is ready to provide all eggs to Russia.
Measures taken by Russian authorities
In this context, domestic egg producers increase production volumes. By the end of ten months of 2023, egg production increased by 2.3%, reaching 31.74 billion eggs, the press service of the Ministry of Agriculture of the Russian Federation reported to socialbites.ca. They predicted that positive dynamics will continue at the end of this year.
“At the same time, in the context of rising production costs and increased consumer demand, often due to market excitement, there will be an increase in chicken egg prices in 2023. To stabilize the situation, a number of measures are being implemented to support producers and increase supply in the domestic market. “Therefore, a plan for additional volume increase has been agreed with the main producers.”
The ministry’s press service added that expansion work is continuing Trading of eggs purchased from producers without additional price difference. Especially in the regions, weekend fairs are organized and the number of egg sales points is increased at lower prices than chain retail stores.
“Together with the Ministry of Industry and Trade of the Russian Federation, we are working on the transfer of manufacturers and retail chains to long-term supply contracts that will ensure the projected product volumes and prices for them in retail,” the ministry said. Chamber of Agriculture has been concluded.
What do manufacturers think?
Egg producers support zero tariffs.
“This will help stabilize egg prices and quickly stop the speculative influx into this product. Indeed, we are experiencing an imbalance in the market for many reasons, including veterinary risks and increased domestic consumption. We are seeing real turmoil in this product. We are already trading “futures” in exchange for material “speculators appeared who began to do it, this topic began to warm up in society and the blogosphere and fell into the fertile soil of December sales,” Oleg Sirota, deputy chairman of the public council of the ministry Agriculture, Chairman of the People’s Farmers’ Association, told socialbites.ca:
According to him, something similar was observed a few hundred years ago during the Dutch tulip speculations.
“Now this decision will stabilize the market and meet the current demand. At the same time, we hope that this period will not be extended, as Russian poultry farmers will revive and increase their livestock in the coming months. “From now on, this measure may be canceled,” he said.
Andrey Danilenko, head of the Svoe Agri-Food Fund, agrees with Sirota:
“The decision is very timely and will help stabilize consumer prices in the domestic market. At the same time, Russian producers will be able to increase their production volumes during the period January 1 – June 30, 2024, when this measure is implemented.
All our businesses, including those affected by bird flu, will be able to replace imports and maintain price stability within six months. Ultimately, a competent market regulation policy will benefit both producers and consumers.”
What retail chains say
The reason for the decrease in egg availability in Russia These products are delivered by suppliers in a short timeThe press service of the Lenta store chain explained to socialbites.ca.
Magnit’s press service stated that they did not increase egg prices and do not plan to switch to individual sales.
The press service of the retail chain emphasized that “Magnit” imposes minimal and sometimes negative markings on eggs, emphasizing that this is a socially important and traffic-generating product.
“The company continues to develop the practice of long-term contracts with suppliers and seeks to increase the share of such contracts in the egg category. “This mechanism allows you to effectively plan deliveries together with suppliers and contributes to price stability by having a positive impact on pricing,” he added.
They also reacted positively to the zeroing of customs duties on imported eggs:
“We believe that this will help stabilize the situation in the market. “We are considering adding imported eggs to our product range, but we prefer local eggs.”
Retail chains X5, Verny, Dixie, Azbuka Vkusa, Metro, Auchan, OK and Samokat did not immediately respond to the request.
“Retail chains that are members of the Association of Retail Business Companies and the association itself are in constant interaction with state regulators, and federal chains continue to use the mechanism of limiting price increases, but this does not affect the prices of suppliers, and increased costs only moderate price increases in the retail sector. Companies are also increasing the share of long-term contracts with producers, and some large chains always buy eggs only under such contracts. “We expect the measures taken by the government to open egg imports and support producers to have a significant positive impact,” he said.
According to him, the association has noted a long-term and significant increase in wholesale purchase prices of chicken eggs from suppliers since the beginning of autumn. It manifested itself most clearly in the soft egg segment (Procurement of eggs by tender, i.e. competitively).
Karavaev concluded: “The current price situation can be described as abnormal, and retailers are ready to provide maximum assistance to solve the problem of controlling prices and are interested in balanced and transparent pricing in the consumer market.”
What can consumers expect?
Economists expect it to be on shelves in Russian stores Imported eggs could be even cheaper local.
Russia is developing export-import relations mainly in the area of the Eurasian Economic Union, and the main supplier of eggs to the Russian market is Russia. Belarus – about 32 thousand tons per year or more than 90% of imports.
“Potential supply from Turkey will become a new direction, but Turkey’s supply geography shows established routes, so there should be no problems in this regard. In addition, Ankara is able to increase export volumes, as evidenced by actively developing trade dynamics after the decline in 2019,” said University. GV Plekhanova Anastasia Prikladova.
According to him, supplies have not yet returned to 2018 levels (349 thousand tons). In 2022, it was at the level of 240 thousand tons. Wholesale export prices in Turkey are 1,300 dollars per ton, that is, about 66 rubles per dozen C1 category eggs.
“When we look at the supply of eggs from Turkey to Georgia, I state that the input price has increased by around 10 percent.
Taking into account the higher costs of transportation to Russia and payment of value added tax, the expected cost will be approximately 84 rubles per dozen eggs of category C1.
However, considering the price increases of retailers, we should not expect Turkish eggs to be cheaper than 90 rubles per dozen. Of course, this is lower than the current values, but higher than the indicators at the beginning of the year,” Prikladova concluded.