economic causes of rising prices “do not notice”
Deja Vu with a sharp increase in prices for different types of so-called social food products were registered in the domestic market in virtually all of the time of election campaigns the 2000″s (2004, 2006, 2007 and 2009-2010).
Price monitoring conducted by the State Inspectorate for Control over prices, illustrates the dynamics of product development. Past Presidential Elections (2004) characterized by a price crisis in the meat market, while beef has increased in price by 32%. The parliamentary elections in 2006 has risen in price bread - 20-22% higher and the first grade. During the early parliamentary election in 2007 “took off” prices for sunflower oil (59%), milk (49%), beef (20%) and “social” bread (16-18%). In 2009, became more expensive dairy products (22%) and sugar (99%), followed in January 2010, they added the price is 9,5% and 26% respectively. Independent experts, in contrast to the Ministry of Economy, convinced of the absence of any economic preconditions for the rise in price, known as very concrete reasons for this trend.
Political uncertainty, as the economist of the International Centre for Policy Studies, Alexander Acorn, only increases the rate of price growth. Regarding the key reasons, one of them - an increase of social payments, which the authorities carried out since 2004. By the way, the meat crisis that year was largely triggered by just the appearance of additional money from consumers.
“Generous allowances (increase of pensions, scholarships, minimum wages) that are used to of encouraging poor people, give the effect to be counterproductive: a greater return, these people immediately spend the money to buy food. A sharp rise in demand with a steady supply invariably entails an increase in prices “, - explains a senior analyst at investment firm Phoenix Capital Andrew Nesteruk.
experts allocate another specific cause for the growth in food prices in 2006-2007: this period was marked surge in foreign investment and debt capital to Ukraine from abroad. “The fixed exchange rate of hryvnia currency and buy the National Bank of investors have increased the annual hryvnia mass inside the country by 20-30%. As the authorities make no effort to its withdrawal (eg through the production and sale of OGVZ),” extra “money stimulated the rise in food prices” - reminds Andrew Nesteruk.
other objective reason - the world prices for raw materials. Such seasonality coincides with the electoral campaigns in Ukraine. Traditionally, prices for crops are changed after the new harvest: in the late summer - early fall (at the same time held the race 2004, 2007 and 2009). The increase in world prices in 2007 for sunflower oil led to its rise in price by 40-60% in Ukraine.
“Then the market for raw resources, joined venture capital, which is why prices of sunflower reached nearly $ 1000 /t, and oil - $ 2000 /t. A year later the price of sunflower oil have fallen to $ 600-700 /t, - the general director of association “Ukroliya Stepan Kapshuk. Given that 80% of sunflower oil is exported abroad, the Ukrainian market has developed in the wake of global trends.
Because of the low grain yield at the same time became more expensive flour and bread. A similar situation exists with sugar. According to Chairman of the Board Nasua “Ukrsahar” Nicolae Platon, problems with the prices of sugar and seasonal variations traditionally occur before the new production season.
The current election campaign, accompanied by a rise in price of products are objective reasons, and speculative factors. For e1000xample, if you take the same sugar, here, first, world prices have reached a maximum of thirty (in Europe - 1300 Euros /t, in Russia - $ 1200 /t). And secondly, because of the reduction of sugar beet in Ukraine, a deficit of its own beet sugar, which, incidentally, predicted earlier. In addition, weekends and holidays, extending nearly half of January, plus bad weather led to the fact that inventories of sugar in the small towns just ended. A supplement their traders have not yet. And this artificial shortage immediately provoked a price jump.
Head of Research Department Consulting Agency “AAA” by Maria Kolesnik believes that the political factor doubles the volatility of economic conditions. On the eve of elections in Ukraine, few regulators drew attention to the pricing, so in this period in the country usually price destabilization. If during the race there any external challenges, they are just nobody responds. “The authorities at that time engaged in an entirely different question, and they have no time to be distracted by the solution of economic problems. Often the solution found, when it lost too much time “- explains Maria Kolesnik.
Nicholas Platon believes that hysteria politicians around the price situation only exacerbates the problem. “Today the main thing - do not stir panic domestic market, as consumer demand for qualified people to pay is very difficult. In 2007, we have gone through it” - convinced Stepan Kapshuk. Pressure situation leads to the fact that the rise in prices earned by unscrupulous entrepreneurs, who hyping this hype and use political instability in the mercenary purposes.
Taming of the Shrew
According to observations by Andrew NESTERUK any power in Ukraine is able to combat rising prices only by administrative methods (tabu, pressure, restriction, quotas). All previous attempts to overcome price crises in the meat, bread, sugar, oil ended with public accusations of entrepreneurs in unfair competition and inflating prices. Indicative flogging with the imposition of thousands of fines goes into a trial with regulatory authorities. In particular, last summer during active growth in sugar prices Gostseninspektsiya checked about 2,200 enterprises (violations were established in 39% of them). As a result, checks the pricing of sugar penalties amounted to 162 mln. However, most commercial companies are now defending his innocence in court. “To carry out price fixing across the country, which are often blamed for food producers, in practice, very difficult”, - said Andrei Nesteruk.
In 2009 the Agrarian Fund has not purchased from manufacturers or tons of sugar, although the planned purchase of 300 tons Nicholas Platon said that now the state real mechanisms of regulation of price processes in this market are absent - to carry out the intervention of sugar trade, reducing thus price pressure speculators, not anything else.
But regulation in manual mode - this is a palliative, which provides short term effect. “In the long run, entrepreneurs are finding ways to circumvent the prohibitions and restrictions to increase prices”, - says Alexander Acorn. Stepan Kapshuk recalled that the attempt to manually regulate the local oil market two years ago led to a dramatic collapse of exports and stop for more than 15 oil-extraction plants. “In addition to damages, it did not bring - to the fall in prices in the domestic market, this measure is practically not affected,” - he says. After the introduction of export restrictions (quotas and licensing) prices even increased - because of rising raw material costs on the world market.
“Politics” fire fighting “does not justify itself -faduntil extinguish” price hearth in one place, it flares up somewhere else “- sure Maria Kolesnik. For example, when Ukraine was keenly aware of rising prices for meat in 2006-2007, this issue preferred to be solved by import of a huge amount of imported products from Brazil and Argentina. Prices for meat indeed for some time dropped, but the crisis of domestic livestock is only exacerbated (by 01.01.2010, the livestock of cattle dropped to 4.9 million head). Rising prices for dairy products, marked the end of 2009 - also a consequence of ill-conceived policies of the authorities.
“If the market determine the actual market price, which balances between supply and demand above that level than we would like, then use some administrative measures, is likely to lead to shortages of goods in the market and a number of other problems,” - says Andrew Nesteruk.
At the time of the accident with an increase in prices in Ukraine are generally not observed (not counting certain types of products). But there is a danger that increasing the dividend policy the new government simply index the incomes higher than the rate of inflation, and continue the policy of increasing the volume of social benefits.
Svetlana Popel
European stock exchanges were noted on the day a significant reduction
Rate for the dollar fell - an overview of cash markets
Kommersant: The deficit will force the fuel switch to gas
Merkel rejected the idea of a Franco-German Ministry
World markets shuddered because of fears about Greece and the U.S. labor market
Kommersant: The National Bank squeezed hryvnia
Analytical review of the FOREX market
The reason for the recovery of the stock indices could be statistics on the U.S. labor market, which should show growth
Today, the Russian stock market, which from the beginning of the year looks much better than other areas of the world, risks being a very significant pressure
Why before the election is always getting more expensive products
Domestic Theme higher prices for food products suitable for populism and speculation …
While politicians in the election campaign for the electorate to impose his own recipes to combat prices and threatening to punish speculators, we decided to look into the causes of these pre-election increase in the cost of food.
Domestic Theme higher prices for food products suitable for populism and speculation, since they account for about 50% in the consumption basket of the Ukrainians. In fact, this is an excellent illustration of the poverty of our people, consumer sentiment is easy to manipulate. For comparison: in Poland products occupy about 30% of the consumer basket, while in Germany the cost of food for own preparation make up only 10% of
economic causes of rising prices “do not notice”
Deja Vu with a sharp increase in prices for different types of so-called social food products were registered in the domestic market in virtually all of the time of election campaigns the 2000″s (2004, 2006, 2007 and 2009-2010).
Price monitoring conducted by the State Inspectorate for Control over prices, illustrates the dynamics of product development. Past Presidential Elections (2004) characterized by a price crisis in the meat market, while beef has increased in price by 32%. The parliamentary elections in 2006 has risen in price bread - 20-22% higher and the first grade. During the early parliamentary election in 2007 “took off” prices for sunflower oil (59%), milk (49%), beef (20%) and “social” bread (16-18%). In 2009, became more expensive dairy products (22%) and sugar (99%), followed in January 2010, they added the price is 9,5% and 26% respectively. Independent experts, in contrast to the Ministry of Economy, convinced of the absence of any economic preconditions for the rise in price, known as very concrete reasons for this trend.
Political uncertainty, as the economist of the International Centre for Policy Studies, Alexander Acorn, only increases the rate of price growth. Regarding the key reasons, one of them - an increase of social payments, which the authorities carried out since 2004. By the way, the meat crisis that year was largely triggered by just the appearance of additional money from consumers.
“Generous allowances (increase of pensions, scholarships, minimum wages) that are used to of encouraging poor people, give the effect to be counterproductive: a greater return, these people immediately spend the money to buy food. A sharp rise in demand with a steady supply invariably entails an increase in prices “, - explains a senior analyst at investment firm Phoenix Capital Andrew Nesteruk.
experts allocate another specific cause for the growth in food prices in 2006-2007: this period was marked surge in foreign investment and debt capital to Ukraine from abroad. “The fixed exchange rate of hryvnia currency and buy the National Bank of investors have increased the annual hryvnia mass inside the country by 20-30%. As the authorities make no effort to its withdrawal (eg through the production and sale of OGVZ),” extra “money stimulated the rise in food prices” - reminds Andrew Nesteruk.
other objective reason - the world prices for raw materials. Such seasonality coincides with the electoral campaigns in Ukraine. Traditionally, prices for crops are changed after the new harvest: in the late summer - early fall (at the same time held the race 2004, 2007 and 2009). The increase in world prices in 2007 for sunflower oil led to its rise in price by 40-60% in Ukraine.
“Then the market for raw resources, joined venture capital, which is why prices of sunflower reached nearly $ 1000 /t, and oil - $ 2000 /t. A year later the price of sunflower oil have fallen to $ 600-700 /t, - the general director of association “Ukroliya Stepan Kapshuk. Given that 80% of sunflower oil is exported abroad, the Ukrainian market has developed in the wake of global trends.
Because of the low grain yield at the same time became more expensive flour and bread. A similar situation exists with sugar. According to Chairman of the Board Nasua “Ukrsahar” Nicolae Platon, problems with the prices of sugar and seasonal variations traditionally occur before the new production season.
The current election campaign, accompanied by a rise in price of products are objective reasons, and speculative factors. For e1000xample, if you take the same sugar, here, first, world prices have reached a maximum of thirty (in Europe - 1300 Euros /t, in Russia - $ 1200 /t). And secondly, because of the reduction of sugar beet in Ukraine, a deficit of its own beet sugar, which, incidentally, predicted earlier. In addition, weekends and holidays, extending nearly half of January, plus bad weather led to the fact that inventories of sugar in the small towns just ended. A supplement their traders have not yet. And this artificial shortage immediately provoked a price jump.
Head of Research Department Consulting Agency “AAA” by Maria Kolesnik believes that the political factor doubles the volatility of economic conditions. On the eve of elections in Ukraine, few regulators drew attention to the pricing, so in this period in the country usually price destabilization. If during the race there any external challenges, they are just nobody responds. “The authorities at that time engaged in an entirely different question, and they have no time to be distracted by the solution of economic problems. Often the solution found, when it lost too much time “- explains Maria Kolesnik.
Nicholas Platon believes that hysteria politicians around the price situation only exacerbates the problem. “Today the main thing - do not stir panic domestic market, as consumer demand for qualified people to pay is very difficult. In 2007, we have gone through it” - convinced Stepan Kapshuk. Pressure situation leads to the fact that the rise in prices earned by unscrupulous entrepreneurs, who hyping this hype and use political instability in the mercenary purposes.
Taming of the Shrew
According to observations by Andrew NESTERUK any power in Ukraine is able to combat rising prices only by administrative methods (tabu, pressure, restriction, quotas). All previous attempts to overcome price crises in the meat, bread, sugar, oil ended with public accusations of entrepreneurs in unfair competition and inflating prices. Indicative flogging with the imposition of thousands of fines goes into a trial with regulatory authorities. In particular, last summer during active growth in sugar prices Gostseninspektsiya checked about 2,200 enterprises (violations were established in 39% of them). As a result, checks the pricing of sugar penalties amounted to 162 mln. However, most commercial companies are now defending his innocence in court. “To carry out price fixing across the country, which are often blamed for food producers, in practice, very difficult”, - said Andrei Nesteruk.
In 2009 the Agrarian Fund has not purchased from manufacturers or tons of sugar, although the planned purchase of 300 tons Nicholas Platon said that now the state real mechanisms of regulation of price processes in this market are absent - to carry out the intervention of sugar trade, reducing thus price pressure speculators, not anything else.
But regulation in manual mode - this is a palliative, which provides short term effect. “In the long run, entrepreneurs are finding ways to circumvent the prohibitions and restrictions to increase prices”, - says Alexander Acorn. Stepan Kapshuk recalled that the attempt to manually regulate the local oil market two years ago led to a dramatic collapse of exports and stop for more than 15 oil-extraction plants. “In addition to damages, it did not bring - to the fall in prices in the domestic market, this measure is practically not affected,” - he says. After the introduction of export restrictions (quotas and licensing) prices even increased - because of rising raw material costs on the world market.
“Politics” fire fighting “does not justify itself -faduntil extinguish” price hearth in one place, it flares up somewhere else “- sure Maria Kolesnik. For example, when Ukraine was keenly aware of rising prices for meat in 2006-2007, this issue preferred to be solved by import of a huge amount of imported products from Brazil and Argentina. Prices for meat indeed for some time dropped, but the crisis of domestic livestock is only exacerbated (by 01.01.2010, the livestock of cattle dropped to 4.9 million head). Rising prices for dairy products, marked the end of 2009 - also a consequence of ill-conceived policies of the authorities.
“If the market determine the actual market price, which balances between supply and demand above that level than we would like, then use some administrative measures, is likely to lead to shortages of goods in the market and a number of other problems,” - says Andrew Nesteruk.
At the time of the accident with an increase in prices in Ukraine are generally not observed (not counting certain types of products). But there is a danger that increasing the dividend policy the new government simply index the incomes higher than the rate of inflation, and continue the policy of increasing the volume of social benefits.
Svetlana Popel
European stock exchanges were noted on the day a significant reduction
Rate for the dollar fell - an overview of cash markets
Kommersant: The deficit will force the fuel switch to gas
Merkel rejected the idea of a Franco-German Ministry
World markets shuddered because of fears about Greece and the U.S. labor market
Kommersant: The National Bank squeezed hryvnia
Analytical review of the FOREX market
The reason for the recovery of the stock indices could be statistics on the U.S. labor market, which should show growth
Today, the Russian stock market, which from the beginning of the year looks much better than other areas of the world, risks being a very significant pressure