The rise in price of bread will continue after the rise in prices on the world grain market
2017 May 12 ( Friday ) 10:29:07
The growth of world prices for cereals may entail a rise in price in the domestic market of Azerbaijan, depending on imports of grain. So, if in December 2016 the price per a ton of food grain was 122.8 dollars, in January 2017 the cost went up to 137 dollars, and today a ton of cereal is offered on the world market for 187.4 dollars, saidVahidMaharramov, the chairman of the agricultural department of the Center for Economic Research.
According to statistics, the country depends on wheat imports. Last year, 1599000 tons of wheat were imported to the domestic market of Azerbaijan. "This dependence on imports is very dangerous. The country cannot be saved by cotton, tobacco and silk," wrotethe expert on his Facebook page.
It is necessary to note that the contradictory statistics of the Ministry of Agriculture and the State Customs Committee, in terms of established norms of wheat consumption on a national scale, do not allow us to establish exact volumes of local production. For example, the entire strategic stock of bread in 700000 tons is purchased through the Ministry of Emergency Situations. Further, the State Customs Committee informs about import of one and a half million tons of wheat, and the Ministry of Agriculture informs about domestic production of 3 million tons of grain and 1.8 million tons of wheat. At the same time, the internal demand according to official data is at the level of 1.3 million tons. It turns out that Azerbaijan imports wheat twice as much as it needs. How is this possible and which department to believe?
According to Maharramov, the Ministry of Agriculture refutes import statistics, i.е. ignores the data of the State Customs Committee(SCC), and claims that the country provides 80% of its bread. We think that the truth is on the side of the State Customs Committee, since the flour milling enterprises of Azerbaijan are keeping pace with the exchange rate. So, on the wave of devaluation, the largest flour enterprise LLC "Carmen", operating in the structure of Karat Holding, explained the increase in prices for its own products by the increase in the dollar exchange rate. The representative of the company said clearly: "We buy wheat in Russia". In this connection, the question arises: what does the Ministry of Agriculture do, if the domestic demand for bread depends on imports?
"With 1.8 million hectares of arable land, the country cannot provide itself with wheat because of soil degradation, lack of irrigation water (ineffective work of the regional offices of JSC" Melioration and water management "), acute shortage of modern agricultural technology for timely harvesting, cleaning and Sorting of the crop. There is the "brain drain", there are very few competent staff, and there is no vocational training center for the training of such specialists. There is no sound agricultural policy to solve these problems within the framework of the food security policy. The Ministry of Agriculture creates the appearance of work, make a note of local production volumes, which, in fact, is occupied by local district executive authorities,"said Maharramov. According to the expert, most of the wheat of domestic production is of poor quality. This is a fodder grain, which is used to feed cattle.
According to Maharramov, the declared volumes of grain production at the level of 3 million tons raise doubts, since there are not even warehouses for such a crop in the country.
"Last year, the "Respublika" newspaper published an article by the Minister of Agriculture Heydar Asadov, where he writes that during the last 20 years the area of farmland has increased 2.4 times. Further it is said that the volumes of domestic cereal production for 1996 - 2016 years increased from 1 million 18 thousand to 3 million 65 thousand tons, i.е. almost by three times. To doubt these figures, it is enough to look at the statistics of imports of the State Customs Committee and the State Statistics Committee on the public websites of these departments. According to the State Customs Committee, in 1996 Azerbaijan imported 143000 tons of wheat to the amount of 28.6 million dollars. Statistics agency shows that after 20 years, the volume of imports increased 10 times! Last year, 1599000 tons amounting $295 million were imported. Thus, 20 - 20 years ago at the expense of import was satisfied 20-25% of domestic demand, whereas today imported wheat covers 100% of domestic demand,"the expert said.
Thus, the domestic market of Azerbaijan remains unprotected before price fluctuations on the world grain market. Despite the apparent stability of the price of bread (the last rise in price in December 2015 from 40 to 50 qepik), the weight of the loaf falls rapidly. At the same time, in the price of a loaf, the price of grain reaches 10 - 15%, since the weight of the product is in the range of 300 to 500 grams.
Our conclusions about the wholesale cost of a kilogram of grain are confirmed by the information of the Grain Fund, which announced the purchase price of wheat from local farmers at 250 manats per ton of cereals-25 gepiks per kilogram. Taking into account the wholesale prices of producers at the level of 50 gepiks and the cost of grain, the price of kilogram of locally produced flour is approximately twice the purchase price of grain. At the same time, the retail price of a loaf of bread (with a weight of 500 gram) is by four times higher than the price per a kilo of flour.
The retail price of a 50-kilogram bag of high-grade flour is currently 25-26 manats, wholesale (sold directly from the factory) at a price of 23 manats 75 gepiks, the head of the Union of Free Consumers (ESP) EyubHuseynov told Turan. From his words, before the devaluation, the cost of a bag of flour was within 22 manats. "The weight of the so-called"factory bread"according to state standard 27.84.288 cannot exceed three kilograms, but the minimum standard is not established, which plays into the hands of producers. According to the standard, when baking this bread, high-grade flour is used,"Huseynov said.