Ukrkondprom warns of rising food prices due to sharp rise in prices of agricultural raw materials and calls on government to intervene

Nov 05 2020 published c Uncategorized, Activity, earnings, news

He thinks, that such a situation arose, along with another, due to the actual destruction of state market instruments of influence on the formation of domestic prices for agricultural raw materials.

"Government actually withdrew from responding to the situation. State specialized budgetary institution “Agrarian Fund”, which was created to contain shock price fluctuations in agro-industrial markets, almost does not perform important functions of formation of the intervention fund and implementation of agricultural interventions raw materials in the right period. Instead, PJSC “Agrarian Fund” and DPZKU, whose shareholders are the Government, act as private companies, focusing primarily on profit. Therefore, it is almost impossible to buy grain from them, and cost flour, which they offer, not lower than that, formed under the influence increase in world prices ", – stressed the head of Ukrkondprom.

On his opinion, the dependence of domestic grain prices on world conditions is natural for a market economy, but the state must take measures to protect food safety and protection of national food producers from sharp fluctuations world prices. A number of states are trying to maximize reserves through the unpredictability of a pandemic, after all, it is the state must have enough raw materials, to come up with commodity interventions in the case need.

President The association noted, that country, with which the Ukrainian confectionery industry competes in foreign markets, implement an effective state policy to support production food products with a high share of value added.

Alexander Baldynyuk cited the example of Turkey, which is one of the main competitors Ukrainian confectioner in foreign markets and which actively buys Ukrainian grain, to reduce the cost of raw materials for their food producers.

 "The Ukrainian government, vice versa, during this period relies on commodity exports even against the background of forecasts of reductions wheat harvest volumes on 3 million. tons compared to last year ", – Alexander Baldinyuk emphasized.

President Ukrkondprom Association expressed concern about the consequences of the government's policy the COVID-19 pandemic and urged it to take immediate action, in order to restrain the promotion of inflation spirals. After all, due to a sharp rise in flour prices, sugar and oil are inevitable prices for confectionery will also increase, bakery,  pasta and more, which will affect primarily on the most vulnerable categories of citizens. In addition, government delay in solving the problem of a sharp rise in prices for agro-industrial raw materials as well endangers the country's food security and the export potential of industries, exporting goods with a high degree of processing, and not raw materials.

How reported, The State Statistics Committee confirmed the wheat harvest 2020 year at the level 25,1 million. tons., what on 12,4%(3 million. tonnes) less than last year. By the way  by 2 November, from the beginning 2020/21 marketing year Ukraine exported 16,5 million. tons of cereals, with wheat - 10,6 million tons.

The Ministry of Economy at the same time not to see reasons for reviewing the agreed grain exports.

In October, a significant increase wheat prices, oil and sugar alreadydeclared in All-Ukrainian Association of Bakers. According to them, from the beginning of the year the cost wheat rose on 40% (of them only for September – by 25%), only for the first week of october on 30% sugar prices have risen, from the beginning of the year on 50% has risen in price sunflower oil.

According to market participants confectionery, in October this year, the purchase price of sugar increased by 21,1% compared to prices in the previous month, on higher wheat flour varieties for August-October this year. the price increase was 30%, on molasses and margarine - about 7%, on sunflower seeds (purified) price increase amounted to 28,5%.

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