In a recent televised question-and-answer session, Russian President Vladimir Putin issued a rare apology for the country’s surging inflation, specifically addressing the 40% increase in egg prices since the start of the year. He acknowledged this as a government shortcoming, stating, “I apologize for this, but this is a failure of the government’s work.”
Putin’s apology took place during the annual year-end interaction with Russian media and the public. Irina Akopova, a pensioner, raised concerns about the rising costs of eggs and chicken. The spike in prices is partly attributed to a scarcity of essential goods in Russia, intensified by Western trade restrictions following Russia’s “special military operation” against Ukraine.
According to Rosstat, a Russian statistical agency, egg prices rose by 13% in October 2023 and an additional 15% in November 2023. This means that, on average, a dozen eggs cost around 130 rubles (approximately $1.8) in November, a significant increase from the pre-war average of about 100 rubles (about $1.4) per dozen.
Rabobank, a Dutch bank monitoring global egg prices, reported that Russia exported 1.2 billion eggs in 2022, constituting 15% of the global market. However, since the beginning of the war in January 2023, Russia has encountered challenges in exporting eggs due to sanctions from the US and its allies. These sanctions have limited Russian exporters’ access to crucial markets and technologies necessary for producing high-quality eggs.
Consequently, some Russian egg farmers have opted for cheaper feed imports or alternative protein sources for their hens. However, these measures have not adequately offset the increased production costs and maintained profitability. Additionally, some Russian egg farmers face difficulties in accessing veterinary services and medicines for their animals due to the sanctions.
Acknowledging the heightened demand, Putin admitted that domestic production had not increased and pledged corrective measures. In an effort to alleviate the situation, Russia plans to reduce duties on 1.2 billion imported eggs in the first half of 2024, with the goal of lowering consumer costs.
Despite these measures, Russia is grappling with an overall inflation rate, with a reported 7.4% year-over-year increase in November, according to Rosstat data. Putin cautioned that inflation could escalate further, potentially reaching 8% this year, double the Central Bank of Russia’s annual inflation target of 4%.
This surge in prices is one of several challenges facing the Russian economy, compounded by rising military expenditures and Western sanctions. While economists anticipate a difficult future for Russia, Putin remains optimistic, asserting that the nation is on the verge of a new growth phase.
