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Plummeting vegetable prices decelerate Russian inflation

September 6, 2019

1 mins read

Cabbage, carrot, potatoes and beetroot are a few of the most consumed vegetables in Russia and account for a significant share of the consumer shopping basket. As per the Federal Statistics Services (FSS), the increase in the prices of these commodities indicates the inflation rate in Russia.

Real disposable incomes in Russia have been falling since 2014, therefore, the demand for cheaper vegetables has been increasing. The demand for cabbage, a staple of Russian diet, has been spiralling for a couple of years, resulting in inflated prices for the vegetable. Mintec cabbage prices soared 365% y-o-y in May 2019, the highest since 2015. A similar price trend was also seen in some of the other vegetables. The annual inflation and food inflation rate in Russia were at 5.1% and 6.4% in May respectively.  

However, the warm weather in the country resulted in the early harvest of the vegetables, pulling their prices lower from June. Both annual inflation and food inflation eased to 4.7% and 5.5% respectively during the same period and has been moving down since then. As a result, Mintec prices for Russian cabbage in August (end) have plummeted by 50% q-o-q (compared to the start of June). Similarly, Mintec carrot, potato and beetroot prices in Russia have weakened 44%, 35% and 46% q-o-q in August.

H2 Global Outlook

Rutika Ghodekar
Rutika Ghodekar

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