Russia to try stabilising food prices after Putin's criticism

Prime Minister Mikhail Mishustin said on Thursday Russia would prepare measures to stabilise domestic food prices, a day after President Vladimir Putin criticised officials and market players over rising prices for bread, flour, sugar and sunflower oil. Grains traders across the globe will be watching out for any measures that could effect Russian wheat supplies, as it is one of the world's biggest exporters.

Prime Minister Mikhail Mishustin said on Thursday Russia would prepare measures to stabilise domestic food prices, a day after President Vladimir Putin criticised officials and market players over rising prices for bread, flour, sugar and sunflower oil.

Grains traders across the globe will be watching out for any measures that could effect Russian wheat supplies, as it is one of the world's biggest exporters. "We must take concrete measures to effectively hold the prices of products which are important for people - in line with instructions of the head of state," Mishustin told a government meeting, describing it as "unacceptable in the context of declining incomes".

"I would like to appeal to producers, heads of retail chains and, of course, exporters - do not take advantage of people," the prime minister said. Russians' incomes fell 4.8% in the third quarter after their sharpest plunge in 20 years in the preceding quarter due to the COVID-19 crisis. Putin said bread, flour and sunflower oil prices rose by 6.3%, 12.9% and 23.8%, respectively, recently.

Russia harvested a large wheat crop this year, but domestic prices have been rising. To help them stabilise, the agriculture ministry previously proposed setting a grain export quota of 17.5 million tonnes for Feb. 15-June 30. The government is yet to approve the idea. Some livestock consumers have been calling for an export tax on Russian wheat in addition or instead of the quota.

Mishustin did not elaborate on what measures could be taken, and plans to hold another meeting on the issue later on Thursday. But he said the steps taken would be in addition to the increase in an export tax on sunflower seeds and rapeseed from January. "There will be market regulation, regulation by market methods only," Dmitry Peskov, Kremlin spokesman, told reporters.