Russian butter prices soar, testing Putin pledge to supply both 'guns and butter'
Butter prices soar
Price has risen 34% this year, shopping bills show
Putin has promised to balance the war-time economy
Prices rising for milk, money and energy too
By Guy Faulconbridge and Andrew Osborn
MOSCOW, Oct 31 (Reuters) -President Vladimir Putin says that Russia's war economy is well balanced to supply both guns and butter, but the price of butter itself is now soaring as surging inflation distorts parts of the economy.
The price of a block of butter has risen by 25.7% since December, according to the state statistics service.
Reuters reporters found shopping bills showed the price of a pack of "Brest-Litovsk" high-grade butter in Moscow has risen by 34% since the start of the year to 239.96 roubles ($2.47).
"The Armageddon with butter is escalating; we wouldn't be surprised if butter repeats last year's situation with eggs," economists on Russia's popular MMI Telegram channel warned, referring to an earlier spike in egg prices which alarmed consumers.
The steep price rise has prompted a spate of butter thefts at some supermarkets, according to Russian media, and some retailers have started putting individual blocks of butter inside plastic containers to deter shoplifting.
The authorities, who have gone to great lengths to try to ensure the war in Ukraine does not affect people's daily lives, are watching closely.
Dmitry Patrushev, a deputy prime minister in charge of agriculture, said on Oct. 23 that the government would monitor butter prices. He met major dairy producers and retailers and said imports were being stepped up.
Milk prices have soared too as have wages, interest rates, fuel and transport - all price inputs for butter. Butter imports from Belarus are not sufficient so Russia is expecting a big shipment from Turkey, and even from Iran and India, Russian media reported.
DEFENCE SPENDING RISES
Putin has made much of the resilience of Russia's wartime economy, and mentioned the relationship between 'cannons' and 'butter' after he appointed an economist, Andrei Belousov, to head the defence ministry earlier this year.
The $2 trillion economy has so far outperformed expectations: shortly after Putin sent troops into Ukraine in 2022, Western economists predicted its imminent collapse.
Instead, despite the most onerous Western sanctions ever imposed on a major country, it grew faster than the United States and almost all major European countries.
Prices, though, are now rising - as are interest rates, which the central bank hiked 200 basis points to 21% on Oct. 25, their highest since Putin's first term in 2003. The central bank is forecasting inflation of 8.0-8.5% this year.
As it fights a major land war against Western-backed Ukraine, Russia is spending more on defence than at any time since the Cold War - and that is pushing up prices even if the International Monetary Fund forecasts growth of 3.6% this year.
Jim O'Neill, the former Goldman Sachs chief economist who coined the 'BRICs' term in 2001, has questioned how sustainable the situation is if things continue.
"It's all because of enormous Russian defence spending," O'Neill told Reuters of the overall macro picture. "So I think the medium term outlook to long term outlook is quite bleak.
($1 = 97.2455 roubles)
Reporting by Guy Faulconbridge in Moscow and Andrew Osborn in London, Editing by William Maclean
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
