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Oct 25, 2021
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Buckwheat and oatmeal will be blown off the shelves again

Buckwheat and oatmeal will be blown off the shelves again

Photo: Stanislav Krasilnikov / TASS

They encroached on sacred things, and not for the first time – producers of buckwheat and oatmeal are in a hurry to warn retail chains that their products will rise in price by 10-20% in a month. This will happen in November. And trade is in a hurry to notify buyers so that they are mentally prepared and do not destroy everything when they see new prices. Farmers justify themselves by the increase in the cost of raw materials and packaging. In addition, we have buckwheat – it grows in the Altai Territory, and there, they say, “there was a crop failure.”

They collected it, but the quality is so-so. And the region is the main supplier of “black porridge” in Russia. Here buckwheat has risen in price by more than a third. In summer, buckwheat in Russia cost an average of 100 rubles. per 1 kg, oat and pearl barley – 45 rubles. per kilo, flakes “Hercules” – 80 rubles. for 1 kg. Now not only buckwheat, but also oats with barley – barley is made from it – have risen in price by a third. The rise in prices continues not only for cereals, but also for leguminous crops. We have beans and peas – the cheapest food.

Dmitry Leonov, Deputy Chairman of the Board of the Association of Food Producers and Suppliers “Rusprodsoyuz” reported “SP”that the cost of raw materials on the cereal market is really growing:

– In the last month alone, the average wholesale price of first grade buckwheat has grown from 67 to 79 rubles per kilogram. In October last year, a kilo of first grade buckwheat cost an average of 57 rubles. In addition to the growth of raw materials, logistics are becoming more expensive, including international transport and the cost of freight. Freight transportation for the year has risen in price by at least 20%. All packaging materials continue to grow in price: for many types of packaging, the annual growth exceeds 100%.

Throughout the past year, suppliers, at the expense of their own profitability, kept the growth of costs in check so that the consumer would not feel it on the shelf. Many worked in the negative in the hope of stabilizing the situation and continue to do so today. Wholesale prices at which suppliers buy oat flakes (raw materials) have grown by an average of 30% since spring. Some suppliers buy oatmeal from groats, from which they themselves produce flakes, and some manufacturers buy ready-made oat flakes, pack them and sell them under their own brands.

The rise in raw material prices in 2021 was the key reason for the rise in the price of oatmeal. But the increase in wholesale prices was influenced by a decrease in production and a deterioration in grain quality in the 2020 harvest.

Retail chains receive notifications from groats producers about price increases by an average of 15%. Suppliers cite the fact that the end of the grain harvest has not yet led to a decrease in prices, but caused further growth.

Interestingly, the price of Russian raw materials has grown within thirty percent, and the cost of plastic and cardboard containers over the past year – by more than a hundred. The main increase in prices is observed for buckwheat, minimal – for rice, other cereals and legumes on average in purchases show an increase of 12-15% over the past two months. Sellers will tearfully adjust to the market situation. Meanwhile … the total buckwheat harvest in Russia this year is promised to be rather big – 900 thousand tons against 892 thousand tons a year earlier.

General Director of the National Fund for Consumer Protection Alexander Kalinin believes that there are no serious reasons for increasing the cost of cereals in stores.

– The harvest is good this year, they buy abroad – good supplies from China. In order for the goods to rise in price, it was necessary to come up with reasons. Probably invented. Most likely, these are: electricity and heat energy, logistics, storage, packaging, transportation. Of course, there is a whole range of problems associated with storage, packaging and delivery. You can think of it: there is a penny, there is a penny – that’s why the price has risen.

“SP”: – Information about the rise in price of buckwheat appears with enviable regularity. But then, when people rush to buy it, for some reason the price goes down? There have been several such cycles lately.

– Appetite, they say, comes with eating. If a person is sick with the “greed virus”, then his appetite is regularly played out. So, on the one hand, there are objective reasons. On the other hand, if the goods have been in the warehouse since last year, and almost any cereal can be stored for more than one month, or even more than one year, then you need to understand the details. And in them – the devil with horns is hiding. In addition to the reasons that I have outlined, these are also the salaries of people, including middle and top managers. All this is included in the cost, as economists say. And since they say so, you have to set the price higher.

In general, you need to study the details. Maybe I’m an illiterate and short-sighted person, but I don’t see any serious reasons for raising prices. Sometimes you find insanely expensive seasonal goods on the counter, and no logic helps explain such a price. No economic calculation is appropriate. Let’s say in a cold, frosty February tomatoes for 300 – this is understandable, but now, when everything is ripe, it is surprising.
But if you delve into your experience, then you can find an explanation, because the disease is not only a market one.

Back in Soviet times in 1972, despite my youth, I worked as the first secretary of the city party committee in a fairly large city of Chernozem region with a population of 88 thousand inhabitants. Once the bureau of the city committee was assembled. I remember that the first item on the agenda was sending a group of experts to the Astrakhan region to purchase agricultural products for winter storage. The chairman of the city council reported, telling how much the city needed: potatoes, cabbage, beets. He informed about the composition of the delegation, about the regions of the region to which they will go for the goods.

I, a young leader, listened and could not understand anything: why from a city located in the Black Earth Zone it is necessary to go to another region for food? I asked the chairman of the People’s Control Committee: “Vladimir Afanasyevich, would you please explain whether from your point of view it is necessary to go somewhere? Do we have that all this is not growing? Is the land bad or is there not enough people? ” The answer is silence. Finally, the chairman of the rural district executive committee answered: “Alexander Yakovlevich,” he said, “you are a new person with us. You will work, you will understand. “

I started working and it turned out that the “hardworking people” did not want to work in the countryside. I started to create vegetable plantations, fought for four years and nothing came of it! It seemed to people better to sit on a bench and gnaw seeds, knit a sock and … curse the authorities. They worked where it was possible to “take away” something. In the village, a milkmaid, if she could bring home a large bag of concentrate and a can of milk from a good cow from milking, then she liked the job. In general, people worked mainly in factories, where the salary was higher.

This season there are low carryover stocks from last year. Sellers are forced to partially accept price increases from producers in order not to create a shortage of goods on the shelves. The network is trying to negotiate a delay in the increase in purchase prices or to do it in several stages. Product suppliers throughout the past year have tried to contain the rise in selling prices at the expense of their own profitability. But today they are forced to either raise the selling prices or leave the market.

In addition, the growing prices could have been affected by the end of the ban on the export of cereals. The export of buckwheat, buckwheat cereals and buckwheat grain from Russia was prohibited from June 5 to August 31 in order to maintain the required volumes of products in the domestic market and prevent sharp price fluctuations.

The Ministry of Agriculture confirmed that food producers amortize the growth in the cost of products at the expense of their own profits since last year. This year, the cultivated area for buckwheat has grown by 12% – up to 976 thousand hectares. The rise in prices for buckwheat should slow down against the background of a new crop entering the market. The volumes of local production of the main types of cereals and raw materials for them fully meet the domestic demand. So you can take your time to run to the nearest store with your wallet.

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