Bread’s price should be regulated by the market

The stabilization funds of flour form the authorities of the country and regions of the region. But it will not be possible to escape from the increase in the price of bread. The Minister of Agriculture Saparkhan Omarov, who noted that the harvest in the country is about 2.5 million tons below last year’s, recognized this. This caused the price of wheat to rise, and flour also jumped.

The reason for the low crop is a summer drought and rains in the autumn, which delayed the fear and caused the seaming and growing of grain.

According to the flour-monomers, by the beginning of harvesting a new crop, on August 15, the flour of the first grade cost 94 tenge per kilogram. Wheat peasants then sold 60 – 62 thousand per ton. Today grain costs from 70 to 88 tenge depending on quality. In this regard, processors forced to raise the prices for flour, and now it stands from 110 tenge per kilogram. A bread roll of such flour should cost approximately 100 tenge.

“When we come to the market and see that meat has risen, we automatically understand that sausage and forcemeat are getting too expensive,” said Evgeny Gan, president of the Union of Grain processors and Bakers of Kazakhstan. – Because their price depends on raw materials. In the same way, the price formation of the whole range of products for which grain is a commodity is taking place. So, in the price of bread there is nothing surprising. This is the value chain added. The first link has increased – all the others will grow.

The further development of the market situation is not easy to calculate, notes the expert of On the one hand, the peasants expect the price of wheat to rise to 100 tenge per ton. In this case, the flour-flour flour will be forced to increase the price to about 150 tenge (since the yield of flour is 74% from a ton of wheat). The bread roll in this case will increase to at least 130 tenge.

However, the opposite option is more likely – the rapid decline in grain prices. In fact, at the present cost of raw materials, Kazakhstan flour is not competitive in foreign markets. Processors are currently only available on the local market. Once demand is closed, grain sales will fall. In addition, the peasants will be forced to cut the price.

— In my opinion, the price for grain is too high for us, — said DOS-Mukasan Taukebaev, director of the flourmill “Mutlu” (Karaganda region). – Fears about the low yield year have affected. This has affected the mood of our peasants and buyers. There is a stir. In principle, the grain was collected enough. In addition, there are now large volumes from Russia – from Altai, Kurgan, Omsk, Novosibirsk, and Orenburg. If it were not for Russian wheat, our wheat would already cost 100 tenge today. But imported grain, even with delivery, costs about 80 – 82 tenge, this and limits the growth of the local. Nevertheless, I think the price will fall by the new year. Now – the peak, which will go down as soon as the internal market is saturated. Therefore, I think the price will drop to 75 tenge by The New year. In the spring, when stocks begin to end, the price can return to 85 thousand AND in the summer, if there is a devaluation of the tenge or a jump in the cost of diesel fuel, the price can reach about 100 thousand

In addition, so far, the increase in the price of grain is already reflected on the cost of those types of agricultural products where fodder for food is used – poultry farming first. Sergei Sergin, director of the poultry farm “Revival of the XXI century”, said that the starting food for chickens increased almost twice – from 120 thousand tenge to 200. This forced to increase the selling price of goose – from 1300 tenge per kilogram to 1800. If the dynamics of the increase in the price of grain continue, bird producers will also be forced to raise prices.

True, the government thinks how to support poultry and pig farmers, who also depend on forage. The mechanism of allocating grain from the resources of “Proto Corporation” at fixed prices is being discussed. This will also allow fixing prices for final products.

With regard to administrative price restraint measures, the flour-monomers consider this approach obsolete and ineffective. The market mechanism should work. The price of raw materials has increased – the next element works, and this is inevitable. It is another matter that in this line it is necessary to monitor whether the interests of intermediate links have not grown. That is, re-merchants. Control is needed here.

“For us, mills, there is no benefit from the appreciation,” said DOS-Mukasan Taukebaev. – We in any case get our margin of about 2 tenge with a kilogram, no matter how cost of flour – 100 tenge or 150. The incomes of bakers also from this will not grow much. The profit will go to the peasants, to support the agriculture, to the development of the village. The peasants will have enough funds to plant more, buy new equipment and pay decent wages to workers. Young people will remain in the village, because there will be work. And the village will begin to live and develop. Moreover, to interfere with bread pricing is to continue burying agriculture. And to those who are hard, the state helps, paying for targeted social assistance. That is, the state regulates the level of income, and the price for bread should regulate the market.

Sergey Byayanov

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