THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY
According to Russia’s Federal State Statistics Service (Rosstat), Russia’s headline consumer price index
(CPI) rose to 4.4 percent year-on-year in June 2017 from 3.5 percent at the end of March 2017. Food prices drove the CPI increase, spiking to 4.8 percent year-on-year in June 2017, up from 3.5 percent at the end of March 2017. The key factor behind the increase was inflation in the fruit and vegetables segment fueled by reduced supply and delay of the new harvest due to the unusually cold weather in the period. The CPI uptick in June is seen as temporary with Russia currently on track to end the year comfortably within the 4 percent annual CPI target set by the Central Bank of Russia.
Staff
Deanna Ayala
Agriculture in the News Agricultural Situation
General Information:
According to the Russian Federal State Statistics Service (Rosstat), Russia’s headline consumer price index (CPI) totaled 2.3 percent in June 2017 (since the beginning of the year), compared to 3.3 percent registered in June 2016. The food products component of the headline CPI number1 reached 3.4 percent at the end of June 2017, up from 3.2 percent year-to-date at the end of June 2016.
Chart 1. Food Products CPI in 2013-2017 (Percent change from December of the previous year)
Source: Rosstat
On an annualized basis, the headline inflation rate in the second quarter of 2017 rose to 4.4 percent year-on-year in June, up from the historical low 4.1 percent at the end of April and May 2017. The food products component of the headline CPI number spiked to 4.8 percent year-on-year in June 2017, from 3.5 percent at the end of March 2017. The key factor behind the increase was inflation in the fruit and vegetables segment where prices jumped 8.3 percent month-on-month in June 2017 fueled by reduced supply and delay of the new harvest due to the unusually cold weather in the period.
The June CPI uptick proved to be short-lived, however, as headline inflation fell to 3.9 percent year-on-year and food prices declined one percent month-on-month in July with the start of the new harvest supplies. Prices fell 0.1 percent on a weekly2 basis for three weeks in a row through August 14 and came in flat the week ending August 21. Weekly declines of prices for fruit and vegetables in the range between 3.6 and 3.9 percent were the main driver behind the deflation. For more details on weekly food price movements reported by Rosstat please see the table below.
1 According to Rosstat, in 2017, the weight of food products in the structure of its headline monthly CPI number is 38.08 percent, while the share of non-food items is 35.67 percent and services account for the remaining 26.25 percent of the total CPI.
Most analysts, including the Central Bank of Russia (CBR), currently expect deflation for the whole month of August 2017. However, the CBR believes that in the coming months “there is a risk of increased food inflation due to a possible decline in harvest of certain vegetables and fruits, which may also lead to higher inflation expectations.” At the same time, the trend to bring annual inflation to the
CBR’s target level of 4 percent is still there, according to the CBR, which also stressed the need to maintain a moderately tough monetary policy to further consolidate inflation near 4 percent and limit inflationary risks.
Product name
2.80
Cucumbers, fresh 1.70 -3.30 -4.90 -2.90 0.00 1.30 -5.60
-6.10 -3.90 -6.20 -51.6
Source: Rosstat, Weekly CPI Estimates
