Prices for dairy products grew by 16.9% in 2014 in comparison with 2013 in Russia

Russian dairy market entered this year with many problems: high rate of inflation, ruble devaluation, growth of credit rates, etc. Now the situation is aggravated, and forecasts for the current year force operators to lay essential risks in production and processing.

The rate of inflation in the country was at  neither 6%, nor 10%, as Russian officials forecasted. According to results of the year the final rise of prices made 11.6% in Russia. That fact undoubtedly upset D. Medvedev:  “It is necessary to work together with owners of store chains, producers, mediators, not to allow unreasonable growth of prices,” the prime minister said.

Prices for dairy products grew by 16.9% in 2014 in comparison with 2013, their growth for butter made 20.7%. Such negative indicators testify the only one thing – in conditions of falling consumer ability the demand will decrease in 2015.

After grandiose financial injections in December, the Central Bank of Russia had managed to restore the ruble in the end of the year, but right after holidays it continued the decline. An average US Dollar-Russian Ruble exchange rate was 1 to 65 last week. In these conditions prices are increasing for import (direct influence) and for domestic products (which have imported components: packing, ingredients, services) therefore rate of inflation continues the growth in Russia.

Increase of key interest rate to 17% by the Bank of Russia led to revaluation of interest rates for loans of agrarian enterprises. There is high probability that as a result a part of investment projects can become unprofitable.


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