Tuesday, January 25, 2011

Russia Imposes Food Price Controls

Zero Hedge this morning is pointing to a story in the Gazeta.ru, about the Russian government imposing price controls of basic foodstuffs.

According to the Gazeta (via Google translate, with light copy editing):
The [Russian] government may introduce price caps on buckwheat, potatoes and other socially important goods. But this is little help to curb inflation, which in only in January has reached about one-third of the annual norm. During the year inflation will reach up to double-digit values, experts say. 
Ministry of Economic Development does not rule out that in 2011, tools could be used to establish maximum prices for certain types of food products, said Deputy Minister Andrei Klepach on Monday. "This is a tool [price controls] which can be used, and I do not rule out that such restrictions will have to use this year," said Klepac. Price controls would be related primarily to buckwheat, potatoes, fruit and vegetables, added the official. [ . . . ]
A marked increase in prices of foodstuffs began in the second half of last year, and efforts to stop these price increases have not yet succeeded. "The risk is significant for increases in wheat and grain prices this spring and the grain—and, hence, subsequent increases in bread and meat," admitted Klepac. 
Do keep in mind, Russia experienced a terrible wildfire last summer, which affected croplands for several weeks. 

Still these price controls are troubling. As commodity prices rise, and those rises are passed on to consumers, expect more inflation, like in the UK, and EU and in the US, and price controls in more statist countries like Russia and China. 


  1. Interesting article, well we are all about five missed meals from revolution.

  2. Nixon,

    Tried this in America "wage and price controls". Note: The program failed big time and inflation came with more negative impact on the people.

  3. It was not Nixon, so much as Ford that tried wage and price controls, in his infamous "Wip Inflation Now" program.



  4. "Price controls would be related primarily to buckwheat, potatoes, fruit and vegetables,"...water, oil, wind, air!

    From Kansas - recovering from the S.O.U. speech.


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