Last update:November 13, 2024, 5:53 p.m. IST

The price of a piece of butter has increased by 25.7% since December. This is three times higher than the official inflation rate of 8.6%. Butter thefts from Russian supermarkets are increasing

President Vladimir Putin said Russia’s war economy was “well balanced to provide both weapons and butter.” (Getty Images)

The Russian economy continues to reel under the impact of the war in Ukraine, with inflation going from bad to worse, making it difficult for the common man to buy everyday goods.

Reports of butter thefts from Russian supermarkets are circulating. In a recent incident, two masked men stole 20 kg of butter from a dairy. Reports also show that supermarkets are attaching anti-theft tags to meat boxes to prevent shoplifting.

Such incidents reflect the dire situation in Russia. President Vladimir Putin’s spending on arms and ammunition in the war in Ukraine comes at the cost of soaring prices of essential goods.

How much does butter cost in Russia?

The price of a piece of butter has increased 25.7% since December, according to the state statistical service. This is three times higher than the official inflation rate of 8.6%, according to The Telegraph.

Journalists found that shopping invoices showed that the price of a packet of premium “Brest-Litovsk” butter in Moscow had risen 34 percent since the start of the year to $2.47.

According to the Moscow timetablefood producers’ union Rusprodsoyuz said a kg of butter now costs $10.66, an increase of 20% since January.

Economists from the popular Russian channel MMI Telegram have warned that the “Butter Armageddon” is on the rise, which is a repeat of last year’s situation with eggs.

Soaring egg prices in 2023 alarmed consumers as authorities rushed to remedy them with imports, just as they are now doing with butter.

Dmitry Patrushev, Deputy Prime Minister for Agriculture, said on October 23 that the government would monitor butter prices. He met with major dairy producers and retailers and said imports were increasing.

Why are butter prices increasing?

Russia currently imports butter from the United Arab Emirates (UAE) and Turkey to avoid the problem. It imported 20 tons of Turkish butter last week, according to the Moscow Times.

The UAE has so far supplied 90 tonnes of butter to Russia, which also began importing butter from Türkiye in October.

Belarus, Russia’s largest butter supplier, increased its exports by 9% this year to 110,000 tonnes.

Bloomberg noted that a quarter of butter consumption in Russia comes from abroad, according to figures from the butter industry lobby group. However, since the start of the large-scale Russian invasion of Ukraine in February 2022, many traditional sources of butter, including New Zealand and Latin America, have frozen their butter shipments to Russia due to Western sanctions.

The news agency also said the overhaul of supply chains coincided with the overheating wartime economy that triggered a surge in cheese and ice cream manufacturing. Bloomberg reported that producers use the same cream to make butter and other products, which has further driven up butter prices.

President Vladimir Putin has previously claimed that Russia’s war economy is “well balanced to provide both weapons and butter.”

How is the Russian economy affected?

Last month, the Russian central bank raised interest rates to 21%, almost seven times that of the euro zone. He hopes that by raising interest rates for the “overheating economy,” inflation could fall to 4.5-5% by next year, down sharply from 9.1%. of August.

Putin has called on officials to stabilize the Russian economy, but has shown no intention of cutting defense spending, set at a record 13.5 trillion rubles ($138 billion), or 6.3% of GDP. Russian, in next year’s budget.

War-related industries, such as transportation and shipping services, have boomed in recent years.

Russia’s $2 trillion economy has so far exceeded the expectations of Western economists who predicted its imminent collapse after the war in Ukraine. Despite the harshest Western sanctions imposed on it, Russia has grown faster than the United States and almost all major European countries.

Due to high defense spending, there is a rush to hire in the sector, which has kept unemployment at a record low of 2.4% and forced private employers to raise wages to remain competitive , according to a report from the Financial Times.

Central Bank Governor Elvira Nabioullina told parliament in late October that persistently high inflation was a sign “that demand has far exceeded the economy’s production capacity,” the report added.

The International Monetary Fund forecasts growth of 3.6% this year.

Jim O’Neill, the former Goldman Sachs chief economist who coined the term “BRICS” in 2001, questioned how sustainable the situation was. “This is all due to huge Russian defense spending,” O’Neill said of the overall macroeconomic situation. “So I think the medium-term and long-term outlook is quite bleak.

Will the war in Ukraine end under Trump’s presidency?

Russia has no intention of stopping the war. But Donald Trump recently said he could end the war in 24 hours because he wants the Russians and Ukrainians to “stop dying.”

If the ceasefire holds, Ukraine could lose substantial support from the United States, which has provided the war-torn country with $108 billion in aid, and Russia could benefit from the lifting of sanctions against him.

A Kremlin spokesperson, quoted by the Fortunedeclared the United States to be “a hostile country that is both directly and indirectly involved in a war against our state.”