- Producer prices fell: Russian food producer prices declined 0.7% month-on-month in November, reversing October’s 0.5% gain and signaling a short-term easing in cost pressures.
- Inflation still elevated: Despite the monthly drop, food producer prices are up 11.3% in 2024 versus 2% in 2023, with beverages up 11.2%, pointing to persistent inflationary pressure.
- Mixed sector dynamics: Food prices fell in November while beverage prices rose 0.4% month-on-month, with annual beverage inflation at 11.4%, suggesting resilient consumer demand in drinks.
- Market impact: The November correction is neutral to slightly bearish for grain and oilseed markets in the short term, but high annual inflation may keep a floor under raw commodity prices.
Russian Food and Beverage Producer Price Overview
Russian food producer prices fell 0.7% month-on-month in November, according to Rosstat, reversing a 0.5% increase in October. This move comes after a volatile pricing pattern in 2024, with a 0.1% decline in September and gains of 0.7% and 0.1% in August and July, respectively.
Since the beginning of 2024, food producer prices are up 3.5%, with November food prices 5.8% higher year-on-year. The beverage segment diverged in November, posting a 0.4% monthly increase and an 11.4% rise compared to November 2023, accumulating a 10.8% gain year-to-date.
Food and Beverage Producer Price Data
| Category | Month-on-Month (Nov 2024) | Year-on-Year (Nov 2024) | Change in 2024 (YTD) | Full-Year 2023 |
|---|---|---|---|---|
| Food producer prices | -0.7% | +5.8% | +3.5% | +2.0% |
| Beverage producer prices | +0.4% | +11.4% | +10.8% | +7.0% |
Market Implications for Grains and Oilseeds
The November decline in Russian food producer prices is neutral to slightly bearish for grain and oilseed markets in the short term. Softer domestic food pricing suggests some easing of demand-side pressure, potentially freeing up more agricultural commodities for export channels.
However, the sharp acceleration in full-year 2024 food inflation to 11.3%, compared with just 2% in 2023, underscores ongoing cost pressures throughout the production chain. This elevated cost base is likely to support a floor under raw agricultural input prices, limiting the downside for grains and oilseeds even if short-term domestic demand cools.
In contrast, the beverage sector’s continued price growth, with an 11.4% annual increase and a 0.4% month-on-month gain in November, points to resilient consumer demand despite higher costs. This strength may sustain robust demand for specific agricultural inputs used in beverage production, even as broader food price momentum moderates.
Traders should watch whether November’s decline marks the start of a broader disinflation trend in Russian food producer prices or simply a temporary correction within a still-inflationary environment.
Source: Market Data
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