The increase of prices is the result of anti-crisis policy, along with a further worsening of the income situation of the population. Specialists from the Economic Research Center at the Institute of Globalization and Social Movements (IGSO) have come to this conclusion. In Russia, the increase in prices for food contribute to high worldwide oil prices, providing the material basis for the development of speculation. Profit from commodity monopolies does not follow economic development, but the maintenance of the ruination of the national food speculation market.
The probable recurrence in this current year of the collapse of speculation in 2008, or a partial drop in prices on the stock and commodity markets, such as in the spring of 2010, will not lead to a reduction in food prices. "Food products of the economic group will continue to rise in 2011. Gold and silver will also strengthen its position, while speculation in raw materials and securities again entered the high risk zone "- believes Boris Kagarlitsky, director of IGSO. In his words, the growth in world food prices to a great extent affects the consequences of monetary methods to combat the manifestations of the global crisis in 2008-2010. Valuing food, it pays people for two years of macroeconomic stabilization and restoration of the power of the relative stability of the banking sector. State aid remains the main doctrine of anti-crisis speculators.
In 2010, despite high world prices for petroleum products there was a sizeable decline in living standards of most citizens in Russia. "Demand has focused on the most economical products of the group. The area of commodities returned to major speculation. Buckwheat has risen nearly 200% in the year 2010, cabbage and potatoes have risen by 100%, and wheat by 75%. Relatively little increase in the cost of ‘cheap protein’, chicken meat and eggs, not only because of wide offer, but the mass departure of the buyer to even more modest food" said Vasily Koltashov, director of the Center for Economic Research of IGSO. The government's ban on the export of grain in 2010 helped to keep prices for bread low (the increase was only 6%). But the pressure of speculation on other products is likely to accelerate the growth of prices for flour, bread products and pasta in 2011.
In September 2009, IGSO presented a report “The Nature of Global Inflation. " It warned about the impending growth of world prices for basic necessities, especially the food cost group. The document considered how a general decline in consumer demand can influence prices of the most necessary public goods. It was proved that regarding the weakness of grassroots demand, policy subsidizing the private sector leads to increased speculation. Banks use the funds received from the government not to lend to industry, but for market speculation. In this case, the narrower the consumer market, the greater the importance of food speculation. This exact scenario was realized in 2010. Crop failure was merely an additional factor. |