Due to the effects of the COVID-19 pandemic and uncertainties in the world economy, constant pressure on supply chains, rising logistics costs, the price of food wheat continues to rise in the world markets due to the creation of reserves in excess of demand by many countries and various protectionist measures of wheat-producing countries in order to protect the domestic market, it is stated in the joint information of large flour and bread producers.
The joint information reads that due to the political and military conflicts in the countries that are the main producers of food wheat, there are serious price and supply risks in the world markets, as well as restrictions on the global trade of these products. The uncertainties caused by the conflicts, the sharp increase in the logistics costs of food wheat, the export restrictions and the export bans imposed by other producing countries have led to a decrease in the supply in the world market and an increase in prices.
According to the UN Food and Agriculture Organization (FAO), in July 2022, compared to the corresponding month of 2021, the global food price increase is estimated at 13.1%. According to the organization’s forecasts, the volume of global production is expected to decrease in 2022.
In addition, one of the issues that is particularly important for our country is that the high export tariffs imposed by Russia, which is one of the largest food wheat producers and the main source of wheat exported to Azerbaijan, are still in force since February 2021.
Due to this situation observed in the world markets and the limitation of exports, business entities importing grain and flour to the country have faced serious price pressures. In July of the current year, the average import price of food wheat to the country was 402.46 US dollars, which is 67% compared to the corresponding month of 2021 (average import price 241 US dollars), and 18.4% compared to December ( average import price of US$339.89) is high.
Taking into account the current import prices (the average monthly import price of food wheat for the last three months is 365 USD) and processing costs, the upper limits of prices have been determined: the highest price limit for a 50 kg bag of flour in Baku is 40.70 manats.
As a result, according to the new price of flour, the retail price of traditional (round) bread of 500 g will be 55 kapiks, the retail price of 600 g bread will be 65 kapiks, and the retail price of 650 g bread will be 70 kapiks.
