Krasnodar, 3 April.
The economic turbulence in Russia provoked by the spread of the Chinese coronavirus and abrupt downfall of the national currency rate has reportedly caused panic buying in Krasnodar krai. People were seen rushing to supermarkets to buy ‘essentials’ in bulk. Traditionally, the roaring demand resulted in disappearance of such goods as buckwheat, rice, pasta, canned stew, matches, salt, sugar, and toilet paper. The panic did not calm down even when both the retailers and the authorities assured that the food stocks are full, and their scarcity can hardly be expected in the nearest months.
According to Magnit, one of Russia’s biggest retail chains, amid the growing demand to the essential goods, the company increased shipments from its distribution centres to shops by 20%, and those of essentials, like cereals, flour, sugar, sunflower oil, canned goods, children’s formulas, condensed milk, household chemical goods and personal hygiene products – by 30%. These preventive measures were reportedly aimed at ensuring permanent availability of these products on the shelves.
Starting from mid-March, Magnit began to increase the stock in the shops, if their format allows them to do so – first of all in the supermarkets and some convenience shops.
“Now the company maintains its standard delivery schedule to the shops but we have increased their volume to be able to flexibly react to the growing demand,” the company’s press service stated.
Panic buying of essentials is absolutely unjustified, Finam analyst Aleksei Korenev asserts. According to him, Russia to a considerable extent provides itself with agricultural products, especially cereals, grains, sugar, etc.
“People sweep these products away, but they must understand that logistics cannot replenish vacant positions every second,” he says. “It needs time to delivery products from a warehouse to a shop, and then to place them on the shelves. I saw people sweep buckwheat off the shelves, but then in five minutes a new lot was placed there. But, of course, the shelves were empty during these five minutes. The market works in such a way that scarcity of any product may occur when the supply is just 5% below standard. For instance, a buyer came to buy a kilo of buckwheat, but he did not see it on the shelf. Then he goes to another shop where buckwheat is available, but he buys there three kilos instead of one – just in case.”
Dmitri Gelemurzin, Executive Director of Goldman Group, says that “high demand for buckwheat and rice can be easily explained: these are the most expensive cereals, and their prices may be going up first of all.”
But as for the prices, the existing competition among the manufacturers would hardly create a situation when their products would be unreasonably overcharged.
Neither the scales nor the mortality level of the current coronavirus disease (except for certain age groups) agree with the forecasts that the global GDPs should be going down, Alesandr Osin, Freedom Finance analyst, believes.
“If no food rationing would be announced in Krasnodar province in favour of the federal centre, then this region would obviously be much better provided with food products than an average Russian region,” Mr. Osin summarises. “The share of the agricultural complex in Krasnodar krai has of late been 10 to 11%, compared to 4–5% the Russian average.”
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