Freeze on Food Prices Extended

The country's food retailers will extend an anti-inflationary price freeze on basic food products to May 1 after the current agreement expires on Jan. 31, the Agriculture Ministry said Monday.

The freeze on prices for bread, milk, sunflower oil and eggs is designed to rein in inflation, which rocketed beyond government targets to 11.9 percent last year. The extension was agreed to by several food producers and retail chains.

"A formal agreement will be signed on Jan. 31," a ministry spokeswoman quoted Agriculture Minister Alexei Gordeyev as saying after a meeting with food retailers and processors.

She said the list of food products and companies subject to the agreement remained unchanged from an original agreement signed in October.

Among those companies signed up are Wimm-Bill-Dann, the country's largest dairy and fruit juice company, store chains Metro, Auchan and X5 Retail Group, dairy firm Unimilk and vegetable oil producer Yug Rusi.

The Economic Development and Trade Ministry revised upward the country's 2009 inflation corridor by 0.5 percent, but left the 2010 forecast unchanged, a ministry official said Monday, Interfax reported.

"Despite an upward inflation dynamics, parameters for 2010 remain unchanged. In other words, by 2010, inflation should be at 5 to 6 percent due to a package of anti-inflationary measures and stricter monetary policy," said Andrei Klepach, head of the ministry's macroeconomic forecast department.

Inflation in Russia is particularly sensitive to food prices, which make up about 40 percent of the consumer price index, compared with nearer 15 percent in the European Union.

The extension will hold prices until after a presidential poll on March 2.

The country also enacted a new wheat export duty Monday, designed to keep more of the grain at home and drive down prices that have risen to record highs in line with world markets.

Wheat exports will be subject to a tariff of 40 percent of customs value, or no less than 105 euros ($153.8) per ton, through Apr. 30. The tariff replaces an earlier duty of 10 percent.

Reuters, MT