Vegetables are enraged: a May picnic will cost Russians a pretty penny

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The cost of vegetables on the domestic stalls is amazing – foods are rising significantly faster than inflation. At the end of April, fresh cabbage became the leader in price increase, the cost of which has more than doubled since the beginning of the year. In addition to the white one, according to Rosstat, prices soared for other everyday products: onions rose by almost 45%, and tomatoes – by 43%. Given the fall in real incomes, which continues for the fifth year in a row, Russian buyers have every chance to be left without fresh vegetables during the May picnic season.

Calculations of statisticians are as follows: carrots increased in price by 35.3%, and potatoes added 12.6% to the cost. White cabbage beats all records. Product prices rose from 22 rubles. for 1 kg at the end of December 2018 to 45–55 rubles. by April 29, 2019. Rosstat assures that the information is prepared on the basis of weekly registration of consumer prices for 64 types of the most important goods and services, which is carried out in 283 cities of the country.

Experts emphasize that the traditional seasonal factor influenced the sharp rise in prices. The cost will not go down until the industrial volumes of fresh vegetables start entering the Russian market.

According to Anna Vovk, a member of the Chamber of Commerce and Industry (CCI), there was no shortage of vegetables last year. “Year for year is not necessary. Only the transition to more stable varieties (the domestic seed base is practically non-existent) and the development of food storage and processing facilities that can smooth out a seasonal surplus of production and bring guaranteed a sufficient amount of vegetables through the winter can correct the situation, ”she is convinced.

In general, the season of fruit and vegetable ripening invariably reduces inflationary pressure – there are nuances from year to year, of course, but the cycle is monitored fairly confidently, says Vladimir Rozhankovsky, an expert at the International Financial Center. However, seasonality is not the only reason for the rise in prices for products. “Of course, in the winter months of this year, an additional acceleration in the prices of carrot and cabbage products was added by the increase in VAT from 18 to 20%. This can be traced, if we oppose the dynamics of prices a year earlier, he says. “The rise in prices for gasoline is, by the way, an additional factor, since after this the tariffs for commercial transportation also increased.”

The VAT increase has launched a price increase flywheel since the beginning of 2019. Note that the growth is not as harmless as it seems – “only” from 18% to 20%. We are talking about increasing the tax not by 2%, but by more than 11%. Moreover, “along the chain,” as a chain reaction, the rise in price is transmitted along all the links of production and sales.

Since the beginning of 2019, consumer price growth has largely affected the long-suffering fruit and vegetable sector. “The cost of white cabbage, onions, carrots increased, in fact, from old stocks – after all, the vegetable harvest was last year, with 18% VAT. Soon there will be a new crop, and growing products will be even more expensive. Most likely, entrepreneurs will calculate the final cost of their product in advance and will gradually, monthly, raise prices for the same potatoes, but in small steps, imperceptibly, ”says Katya Frenkel, head of the analytical department of FinIst.

But if some businessmen do so that consumers do not see a sharp jump in prices for vegetables even after the seasonal harvest, others may take more radical measures, which means that this increase in prices for cabbages is not the last two times. “There will be those who sharply raise the cost of their goods in the autumn, justifying this by the effect of increasing the VAT on harvested vegetables,” the analyst concluded.

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