Business Watch
The Federal State Statistics Service reported annual 2011 inflation (using the Consumer Price Index (CPI)) as 6.1%—the lowest Russia’s inflation has been in the last 20 years. The Russian government and the Central Bank have been struggling for years to achieve low-digit inflation in order to create a more favorable investment climate and lure foreign investment. Government officials name the low inflation as Russia’s major economic achievement for 2011. Independent analysts attribute the slowdown in inflation to the situation in the food market.
Insufficient terms on investment loans provided for the development of Russia's dairy industry are holding back milk production growth in the country, Deputy Agriculture Minister Shamil Bakhitov has stated. "Dairy cattle farming requires long money with recoupment periods of 10-15 years, but investment loan subsidies are provided for 8 years," he said at the Agrofarm 2012 Exhibition in Moscow.
Exports by Minsk Tractor Works (MTZ ) soared 53.3% in 2011 compared with the same time last year to make up $983 million. The company delivered 51,680 items of equipment overseas, says the company’s marketing center.
“Russia remains MTZ major foreign market. Deliveries to this country last year increased 1.6 times as compared with 2010. The Russian Federation purchased 25,423 tractors. Ukraine is MTZ second largest partner. In 2011 this country bought 7,047 tractors “Belarus”,” the MTZ marketing center stressed.
The Russia-Belarus-Kazakhstan Customs Union has lowered the amount of pork and poultry meat that will be imported into Russia this year. However, while total volumes of pork and poultry are lowered for Russia, volumes of pork and beef have been increased for Kazakhstan and remain unchanged for Belarus.
Floods in Thailand add further uncertainty. Food crisis in the Horn of Africa continues
Global food prices remain high and volatile, hitting the poorest countries hardest and adding to the strains facing the global economy, according to the World Bank Group’s new Food Price Watch released ahead of the G-20 Summit in Cannes, France. While the Bank’s food price index has dropped 5 percent from its February 2011 peak and dipped marginally in September by one percent, it remains 19 percent above its September 2010 levels.
“The food crisis is far from over,” said World Bank Group President Robert B. Zoellick, who has urged the G-20 to put food first. “Prices remain volatile and millions of people around the world are still suffering. The World Bank has been working closely with the French Presidency of the G-20 and our partner international organizations on actions to protect the most vulnerable from the dangers of food price volatility, while also addressing some of its root causes. Let's remember, averting crisis is not just about banks and debt. Millions of people around the world face a daily crisis of hunger and malnutrition. At Cannes, the G-20 can and should take steps to address their needs."