MOSCOW Aug 9 Russia may negotiate a price
control agreement with domestic food producers to prevent
speculative price hikes that would affect inflation after it
banned half its agricultural imports from the West, the
agriculture ministry said late on Friday.
Russia banned meat, fish, dairy, fruit and vegetables
imports from the United States, the European Union's 28 member
states, non-EU member Norway, Canada, and Australia on Thursday
in retaliation against sanctions over the Ukraine crisis.
Agriculture Minister Nikolai Fyodorov has acknowledged the
ban would cause a short-term spike in inflation, but said he saw
no danger in the medium or long term as Russia started to look
elsewhere for substitute imports.
The ministry, referring to a meeting with food sector
unions, said: "Participants at the meeting discussed the
possibility of signing with producers and agricultural products
processors an agreement on ... price policy, to prevent any
speculative rises in prices for agricultural products."
Russia has developed its own food industry over the past 20
years which consists of both home-grown firms such as Cherkizovo
and Ros Agro and local units of foreign
companies, including Pepsico and Nestle.
According to the International Trade Centre, a joint venture
between the United Nations and World Trade Organization, Russia
imported $17.2 billion of food from the countries targeted by
the ban, of which $9.2 billion was in the affected categories.
"While more imports from elsewhere may partly offset the
supply shortage, Russian food prices will continue to creep
higher," BNP Paribas said, noting that the ban would add 1.8
percentage points to Russia's consumer price index over 2014-15.
The prospect of higher inflation could weigh on retail
sector shares - including Magnit, X5 Retail Group
, Lenta, Dixy and O'Key -
"It will be difficult to pass cost inflation on to the
consumer immediately, so we expect some pressure on margins over
the short run," VTB Capital consumer analyst Maria Kolbina said.
(Reporting by Polina Devitt and Maria Kiselyova; Editing by