Groats suppliers warned retailers to increase prices by up to 30% due to crop failure in Russia

In Russia, rice may rise in price by 10-30% due to unfavorable conditions in the Krasnodar Territory, where a significant amount of this cereal is grown in the country. Suppliers have already notified retailers about this, but they are in no hurry to accept the price increase due to risks to demand, informs Kommersant newspaper, citing sources.

Receipt of a notice of a 15-30% increase in rice prices was confirmed in the Lenta hypermarket. The rise in price will occur depending on the manufacturer. The trading network is in no hurry to accept the application, now the retailer expects stabilization in the market. Another retail chain received a notification about a rise in the price of cereals from March 27 by 8-19%, but the decision to revise the price has not yet been made. A third source added that retailers are trying to “keep shelf prices down.”

“According to Rusprodsoyuz, in mid-March, first-grade rice groats in wholesale cost an average of 64.13 thousand rubles per ton against 51.6 thousand rubles a year earlier and 63.7 thousand rubles in February,” indicated in the publication.

Producers believe that due to the rise in price there is a risk of a decrease in demand for rice. In addition, some consumers may switch to more affordable buckwheat. If in February 2022 the cost of rice averaged 108.8 rubles per kilogram, then buckwheat – 100.1 rubles.

It is indicated that the crop failure is associated with an accident at the Fedorovsky hydroelectric complex in the Krasnodar Territory, which occurred last spring. As a result, the area of ​​rice fields decreased from 119 to 92 thousand hectares, and the gross harvest of cereals decreased by 24%, that is, to 650 thousand tons. According to the executive director of the National Rice Union, Mikhail Radchenko, the quality of the current cereal crop is lower due to late harvesting, and this may affect rice production. However, Russia has enough reserves to supply the domestic market. This is due to the ban on the export of rice from the country. In view of this, in the next week, Radchenko noted, the union expects that wholesale prices for cereals will decrease.