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Price of Butter Unrealistically High

Price of Butter Unrealistically High
Markets Review 


2017 October 18 ( Wednesday )  13:41:23
Print version
Русский Azərbaycan

Baku / 18.10.17 / Turan: The government explains the significant increase in butter prices observed recently with external circumstances, namely, the rise in oil prices in the world market.

In September, retail prices for butter in Azerbaijan grew by about 4 manat. For example, a kilogram of butter Anchor in retail chains is offered for 17.2 manat.

The head of State Customs Committee Aydin Aliyev told reporters that the rise in prices in the world market affects the products imported to Azerbaijan. "The main supplier of butter to Azerbaijan is New Zealand," he said.

However, as Turan found out, this is not true: https://russian.alibaba.com/product-detail/unsalted-butter-180848296.html?spm=a2700.8698675.29.241.6a1f6cc0Qes9y6

The state news agency AzerTaj also published an appeal of butter importers to Azerbaijan, which gives the same reasons. The appeal says the price of butter from New Zealand since the beginning of the year has risen more than 30%. Importers said that currently in the world market a kilogram of butter costs 5.20-5.45 dollars.

"Taking into account all expenses, the wholesale price for the sale of New Zealand butter is 15.02-15.97 manat, and the retail price is 15.90-17.10 manat."

It is interesting that the State Customs Committee in its report noted that this year butter is imported into Azerbaijan for $ 4.28.

The economist Natig Jafarli suggested customs explain the difference in the price of oil in Baku and Tbilisi. "Can the State Customs Committee explain why the New Zealand butter is sold in Baku for 18-19 manat, and in Tbilisi for 10-11 manat?" he wrote on his Facebook page.

Jafarli in his turn noted that if butter is imported into Azerbaijan for $ 4.28, or for 7.2 manat, then with the addition of logistics costs it should cost 9.75 manat per kilogram.

"Why is butter sold for 18 manat? Where is it seen that the trade mark-up was one hundred percent?" the expert wonders.

Touching upon 51 butter importing companies, Jafarli stressed that if these companies belong to 3-4 persons, then this is already a monopoly. He said that more than a thousand legal entities and individuals are engaged in importing butter in Georgia, as a result of which a competitive market is being formed.

Meanwhile, an independent analysis shows other wholesale prices for butter in the world market. This is not 5.20-5.45 dollars per kilogram, as the Azerbaijani importers assure, and not 4.28 dollars per kilogram, as customs says. Offers from various world exporters can be seen on specialized websites (alibaba.com/trade). The price of a ton of butter from New Zealand or South Africa is 1.4-3.2 dollars per kilogram. That is, considering logistics costs, customs duties, profit of the wholesale and retail network, the price per kilogram of butter in stores should not exceed 8-10 manat.

Again, we have to repeat the question: Do consumers need to overpay up to 7 manat per kilogram of butter for monopoly and uncontrolled actions of Azerbaijani importers? -71D-