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Why can the price of bread rise now? – Economist tries to justify |

“Why is the price of food wheat high? 20 when it reaches the record level of the year, in Azerbaijan flour and the price of bread did not rise, but now flour Are the expectations about the price increase increased?”

Economist expert Eldeniz Amirov wrote these thoughts on his Facebook page.

He noted that on April 31, the price of 1 ton of food wheat on world exchanges was 403 USA it was for a dollar. What at that time flour, nor did the price of bread rise. But wheat for August 1st prices 328 dollars organized. As you can see, the price of food wheat decreased by 19% in the last 3 months (May, June, July): “Then the question arises why April-wheat in May prices The price did not increase when it was 122% of the current price, but now the increase is inevitable? Since there is no official attitude (exact explanation) about it, we can come to a logical conclusion about the reason by analyzing the situation of the last 8 months.

Let’s look at January of this year. January If we pay attention to what happened in the month of May, we will see that the main reasons depend on what happened in this month. So, in 2022 january The price of bread has already gone up. It would be a serious mistake to raise the price of flour or bread again because the price of wheat has risen to the maximum ($403) after only 2 months have passed. Therefore, what flour 403 dollars price increase was not a topic of conversation when it was 380 or when it was 380.

The expert added that another factor contributed significantly to the fact that the price of bread did not rise in Azerbaijan during these months. This factor was the grain reserve factor. Azerbaijan in January of this year, it imported more grain than ever before: “Even compared to the same period of 2021, 4 times more grain was imported to our country (in 2021 january– more than 1 million tons of wheat were brought to the country in November). It seems that the country’s leadership and relevant entities have already predicted the possibility of war, and as a preventive measure for food security, 300% more import operations were carried out in the month before the war. I think that both the price increase in January and the fact that there was a 4 times excess supply allowed the price of bread to be maintained during the past 7 months. Now the conditions are changing. As reserves are depleted, re-imports should be increased. Currently, the situation in the grain market in the world has become more expensive compared to the beginning of the year. This again requires spending additional funds to keep the price of flour stable.”

The expert added that another factor contributed significantly to the fact that the price of bread did not rise in Azerbaijan during these months. This factor was the grain reserve factor. Azerbaijan in January of this year, it imported more grain than ever before: “Even compared to the same period of 2021, 4 times more grain was imported to our country (more than 1 million tons of wheat was brought to the country in January-November 2021). It seems that the country’s leadership and relevant entities have already predicted the possibility of war, and as a preventive measure for food security, 300% more import operations were carried out in the month before the war. I think that both the price increase in January and the fact that there was a 4 times excess supply allowed the price of bread to be maintained during the past 7 months. Now the conditions are changing. As reserves are depleted, re-imports should be increased. Currently, the situation in the grain market in the world has become more expensive compared to the beginning of the year. This again requires spending additional funds to keep the price of flour stable.”

E. Amirov added that if the price of food wheat rises, the efficient way to keep the price of bread stable is to give new subsidies to flour producers. In the current situation, this way is the simplest way to support the activities of entrepreneurs and to keep the price of bread stable. Another second way is to let the process take its course, saying “it’s a market economy” without giving new subsidies to flour producers. At this time, the negative effects of growth will fall on people. But there is a third way. This way bread and when there is an increase in the price of flour, it is the adjustment of people’s incomes to it. Anyway inflation continues to eat people’s income. It is theoretically possible to match income by cutting other expenses, and people do. But when it comes to bread, this theory is not justified. There is no saving on bread. This must be taken into account. In any case, we have financial opportunities for this. “If additional money is released to the economy inflation “will speed up” thinking is not valid for such cases, it is wrong.

The economist added that for this reason, at least, families with low incomes, low-income families and social There will be a serious need for financial support of people from the vulnerable group.

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