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Siberian region brings in controls on price of bread

© RIA Novosti . Sergey Guneev / Go to the mediabankLoaves of bread
Loaves of bread - Sputnik International
Russia's Krasnoyarsk Region has introduced a two-week moratorium on increases in the price of flour and bread so it can establish the costs involved and set fair prices for bakers and consumers.

Russia's Krasnoyarsk Region has introduced a two-week moratorium on increases in the price of flour and bread, a spokesman for the regional Agriculture Ministry said on Thursday.

The ministry will use the time to establish a working group to assess the cost of producing bread and decide on fair prices.

Russia's grain harvest has been cut severely by an unprecedented heat wave and the country's worst drought in decades, and the government has banned grain exports until the end of the year in a bid to keep bread prices from rising.

The government has repeatedly said there are no grounds for bread prices to rise and the chairman of Russia's upper house of parliament has called on regional authorities to react quickly to any inflation in food prices.

"We are declaring a two week moratorium on prices charged by flour mills and bakeries," Krasnoyarsk Agriculture Minister Leonid Shorokhov was quoted as saying by the spokesman.

"We will...determine how much costs have increased and will eventually agree on objective cost-based prices," he said.

The spokesman said any set price would not cause bakeries to lose money.

"We need to come up with an economically sound price that will allow flour mills and bakeries to break even," he said.

The price of flour contributes about 15 percent to the cost of a loaf of bread, and the ministry said businesses were trying to show that they were losing money at current prices, with higher charges for energy, water and ingredients all playing a role.

The authorities, however, are taking a longer view, as bread prices remained virtually unchanged last year despite 40-50 percent falls in grain prices after a bumper harvest.

In the Far Eastern city of Vladivostok, the retail prices of rice and buckwheat have almost doubled this month, while weekly inflation in Russia hit 0.2 percent in August 3-9 as consumer prices increased at twice the rate of previous weeks.

President Dmitry Medvedev has ordered the government and the prosecutor's office to monitor prices on the agriculture market and foil those trying to cash in on the situation.

KRASNOYARSK, August 26 (RIA Novosti)

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