Seasonal drop observed in the cost of assorted vegetables in retail stores
In July 2021, Russian retail networks experienced a notable decrease in prices for essential food products, particularly for the ingredients commonly used in 'borscht set' dishes. According to a report by AN Prim, the prices of beets, cabbage, potatoes, carrots, and onions saw a significant drop.
The price of beets and carrots decreased by 29.3% and 29.2% respectively, while the price of onions dropped by 23.2%. The price of seasonal apples also decreased by 5.2%, and the price of potatoes saw a decrease of 36.2% for first-price potatoes.
This decline in prices was primarily due to a general decline in fruit and vegetable prices reported by Rosstat. Table beets dropped 26.1%, white cabbage 21.5%, potatoes 21.1%, cucumbers 16.1%, and carrots 7.6%.
The price decreases for these vegetables were part of a broader trend of falling prices for certain farm-level vegetables and fruit observed in 2021, linked to supply factors presumably including a good harvest and seasonal availability.
Although global food prices increased overall in July 2021, driven mainly by meat and vegetable oils, grain prices fell somewhat due to new harvests. This downward pressure on cereals and some vegetables also influenced the Russian domestic market.
The Association of Retail Companies (AKORT) reported that the prices fell in 16 out of 25 categories of essential products in July. Overall, the prices of basic socially significant goods decreased by 3.7% compared to the previous month. The price of table salt decreased by 2.2%, the price of milk by 2.2%, the price of sunflower oil by 4.8%, and the price of rice by 6.9%.
Interestingly, in six out of 25 categories, products were sold below purchase prices, including broiler chicken, seasonal apples, granulated sugar, sunflower oil, rice, and carrots. The price of black tea decreased by 7.8%, and the price of chicken eggs decreased by 6.3%.
These price decreases contributed to cooling inflation for food products in July 2021, with food particularly fruits and vegetables growing at a slower pace. This was reflected by official Russian statistics showing strong month-on-month price decreases in these vegetables, contributing to the easing of cumulative annual inflation.
Sources: 1. Rosstat Report on Food Prices in July 2021 2. AKORT Report on Retail Prices in July 2021 3. FAO Report on Global Food Prices in July 2021 4. Russian Agriculture Ministry Report on Harvest and Supply in 2021
The decline in prices for certain farm-level vegetables and fruit, such as table beets, white cabbage, potatoes, cucumbers, and carrots, was observed not only in the Russian domestic market but also globally, leading to a decrease in the price of broiler chicken, seasonal apples, and carrots in six out of 25 categories. This trend contributed to cooling inflation for food products, particularly fruits and vegetables, as reflected by official Russian statistics. The food-and-drink industry saw a fall in prices for basic socially significant goods like milk, sunflower oil, rice, black tea, and chicken eggs, while the retail sector witnessed a decrease in prices for 16 out of 25 categories of essential products. The finance industry may be impacted by these price decreases due to their potential influence on consumer spending patterns in the lifestyle sector.
