Azerbaijan news

Will the price of flour and bread increase? |

in Azerbaijan flour news about the price increase is spreading. In the western region bread one of the producers told an employee of Pressklub.az that they had a shortage and high price problem for some days, but now they buy flour at the old price (38.5 manats).

In some mass media and TV channels in autumn flour There are reports that the price will increase, as the reason is that this strategic product has increased quite a lot in the world market compared to previous years.

How reasonable is this kind of news, what is the real situation, Azerbaijan can consumers face another increase in bread and flour products in the coming months?

In his comment to Pressklub.az, economist Elbrus Jafarli regrets the spread of such information in the media, adding that such campaigns have nothing to do with real economic conditions:

“It was brought up by hired economist-experts, and they show the situation in Ukraine as an argument. “Ukraine since he cannot take the grain out by sea, he transports it by land, which creates additional costs” and so on.

Firstly, of Ukraine grain Turkey transport, not by land, but by sea way with;

Second, Turkey signed an agreement to buy grain from Ukraine at prices lower than world market prices;

thirdly, Azerbaijan Ukraine generally does not buy wheat;

Fourthly, more than 3 million tons of grain have been collected in the country this year, and there are enough flour reserves..

E. Jafarli reminds that 2 months ago in 2022 state budget changed and an additional 193 million manats were allocated for food security. According to him, the same funds it should be intended for “additional costs” in order to prevent the increase in the price of bread. Because when we talk about food, first of all we are talking about bread.

The expert emphasizes that 1 month ago he was considered the godfather of “imported inflation”. Customs Committee management has also changed, on this account, now imported goods, that is flour there should be no artificial reasons for the increase in price.

“Why are the relevant official institutions of the state silent? Who gave the right to engage in sabotage even without an official explanation”the economist asks.

Economist Eledniz Amirov, the world and Azerbaijan to look from two directions offer does:

Russia as soon as the war started UN the alarm sounded that everyone would starve and the world would sink. More specifically, UNof Food and Village FAO, which is the Economic Organization, made such predictions about the world’s food reserves that people were horrified. This was a serious mistake. The economy does not like scary forecasts. The economic system is like the immune system. Fear destroys this system. Demand increases dramatically and as a result prices rises more. The higher the price, the stronger the fear. Thus, price increases fear, and fear increases price. As a result, before Russia he declared that he will not sell grain, Kazakhstan will sell little by little. Later, India, one of the grain giants, said that it is not selling its grain yet. And China “I 1 billion “How will I satisfy the pain?” he said, and whoever sold it at the highest price began to buy grain. So, the markets are serious offer they created a surplus and the price went up. But then the world saw that UN more rowdy, they calmed down a bit”.

The economist then provides figures: “The price of 1 ton of food wheat rose to $403 on May 1 due to the noise of the UN. But then every month prices down – 380 in June dollars334 in July dollars and fell to $328 on August 1. This is statistical confirmation of what I said above.

Now the UN FAO itself announces that food in July prices index decreased by 8.6%. Thus, the indicator, which was 154.3 in June, decreased to 140.9 in July..

According to E. Amirov, 2 more events act as a factor mitigating the crisis: Ukraine brother of the grain Turkey thanks to export orientation and USA The statement of the Ministry of Finance that the sanctions imposed on Russia have been eased – fertilizer from Russia, foodseed, medicine and medical The removal of sanctions imposed on operations related to equipment will be the factors that will make the world relatively comfortable about the crisis..

Then the economist, who drew attention to the real situation in Azerbaijan, says that the country’s grain needs are 3.6 mln. tons, the total import dependence is 40-42%. But 75% of food wheat depends on imports:

“Last year, 1.887 million from 572 thousand hectares. we have produced tons of wheat. Barley from 374 thousand ha to 1.147 million. ton collected. Apparently, the total does not reach 1 million hectares. But this year 1 mln. 9,000 hectares were planted and wheat and barley were planted in a ratio of about 6:4.

From occupation free 50 thousand hectares of grain were planted in our territories. If complete demining is carried out, this potential 20is equal to 0 thousand hectares”.

The expert then draws attention to the steps taken by the government to keep the price of bread under control and keep wheat prices under control:

“Farmers are given a subsidy for each hectare of grain planted. This year, the amount of this subsidy was increased to 210 manats per hectare. Starting from 2023, a new type of subsidy has been defined. This is a product subsidy. So, if the subsidies given so far were intended for the cultivation of farmland, the second subsidy will be given for the product obtained from food wheat production. That subsidy is for 1 ton 10It will be calculated in the amount of AZN 0. This issue was determined by the requirements arising from the Decree of July 19, 2022 “On a number of measures to increase the level of self-sufficiency with food wheat” adopted by the President in order to ensure food security, including increasing the level of self-sufficiency with basic food products.

But this is a pilot project at the initial stage, Village According to the agreement concluded with the Ministry of Agriculture, it refers to food wheat produced by persons who have undertaken to produce food wheat in farms where modern irrigation systems are applied and delivered to the State Reserves Agency and flour mills. This product subsidy, which will start next year, is supposed to be given for 5 years”.

Eldeniz Amirov reminds that the State Reserves Agency raises the price of wheat it buys from farmers every year in accordance with price increases: “300 manats in 2019, 2020In 2018, it was 380 manats, and in 2021, it was 500 manats, but this year it will pay farmers 580 manats for one ton of wheat. This means a 16% increase compared to last year. Thus, a number of measures have been taken and are being taken to prevent the price of bread, which is a final consumer product, from rising in Azerbaijan. Based on the current situation and expectations that I mentioned above, I do not consider the news about the increase in the price of bread in the coming months to be serious. But it must be noted that these measures are not enough to achieve complete security in a world that is constantly changing and new threats arise from time to time. That is, it is not able to insure the country’s food security against more severe threats in the future. That’s why the head of the country emphasizes from time to time that there is still a lot of work to be done in this matter, and the most important thing is that the dependence on imports should be seriously reduced.”.

Turgut



Azerbaijan news

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