The December rise in price of grain led to a rise in the price of flour

The December rise in price of grain led to a rise in the price of flour

Russia significantly increased the price of flour, after the December rise in price of grain, according to the Institute for agricultural market studies (IKAR).

“The growth turned out to be serious: for the period from 27 December 2018 to January 11 of this year the price of, for example, flour has increased from 500 rubles, reaching 19 500 rubles. per tonne with VAT,” — said General Director of IKAR Dmitry Rylko (quoted by Interfax).

According to him, the rise in price of flour will not be of decisive importance for the growth of prices of bakery products. A major role of the price increase may play a growth VAT. Thus, the production of flour is subject to a preferential tax rate of 10%, but the impact of the VAT increase in related manufacturing bakery products sectors. “The share of wheat in bakery products is low — not more than 20%, prices are more affected by other factors,” said Mr. Rylko.

Recall that in late 2018 exporters have won the right to supply 415 thousand tons of Russian wheat worth more than $100 million for an Egyptian state company GASC. Willingness to ship such a volume could maintain a significant export potential of Russia, but profitability traders threatens the growth of domestic grain prices.