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Why Belarusian Commerce is Wired Out

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Why Belarusian Commerce is Wired Out

Businesses are frantically seeking solutions.

The Commission for State Regulation of Pricing of the Council of Ministers introduced price restrictions on fruits and cheeses within the framework of Resolution No. 100.

It concerns fresh white cabbage, onions, beets, carrots, potatoes and apples prices, which were not imported into the country until January 1, 2022, as well as for hard and semi-hard cheeses produced in Belarus.

The "Belorusy i Rynok" newspaper asked experts what this means.

Viktor Margelov: Commerce is wired out

Viktor Margelov, the Co-chairman of the Minsk Metropolitan Union of Entrepreneurs and Employers, cannot answer the question: why restrictions on fruits and cheeses have been introduced.

- I have no reasonable answer to this question. Probably to replenish the pockets of importers. Yes, a number of trading positions fit into these parameters. However, “cabbage” and “apples” are generally surprising for me: why? Indeed, the cabbage trade price is 30% higher than the established retail price. It is purchased at 2 BYR a kilo, plus VAT, plus an extra charge, and the retail price is 1,60 BYR. The same concerns apples: there are apples of the second-grade quality, and half-rotten, small as walnuts, and there are elite ones that cost 2 USD and even more. How can they be sold at 2.50? Who that comrade, who will want this to do?

Accordingly, we will not have Belarusian apples for sale, it means that we will have to import the ones. Probably the same thing will happen with cabbage and carrots.

Wholesalers ended dispatch, and commerce is feverishly searching for outputs. Only potatoes small as walnuts remained in hypermarkets.

- So, as a result, we got a shortage of vegetables and fruits?

- Yes, it is obvious that this is a deficit. I can understand such measures when they are confirmed by sufficient reserves of goods in the market. Nevertheless, when this is not the case (I'm not talking about half-rotten potatoes), how do you saturate the market? There is no answer.

- But, on the other hand, the Belarusian authorities have imposed sanctions on Western fruits and vegetables...

- But there is nothing to prohibit. Everything is already exported. There are no white cabbage, onions, beets, carrots, potatoes and apples imported to Belarus Until January 1. Traditionally, cabbage was imported from May, and then potatoes from Egypt - these are the earliest purchases that will last until September. However, there was no case to receive cabbage in winter from abroad. But it probably will.

Lev Margolin Prices are rising, they must be limited

“On the one hand,” says economist Lev Margolin, “the 10 percent promised to the low-income segments of the population cannot, apparently, cover the additional costs associated with the economic situation in the world, where food prices are rising. Furthermore, Belarus declared its own sanction against western products, against vegetables and fruits first. Perhaps the first bells have appeared the first consequences of such decisions.”

However, he believes that if food prices are limited, then two options are possible: either these products gradually disappear from the shelves, or they appear under other names, in different packaging and with other prices that are economically justified.

The most interesting thing is that the authors who impose restrictions are well aware of this.

- It concerns fresh white cabbage, onions, beets, carrots, potatoes and apples prices, which were not imported into the country until January 1, 2022, as well as for hard and semi-hard cheeses produced in Belarus.

“There is another option here. When prices rise in all countries around, then the desire to export these goods grows. And if an alternative appears: either to sell here or to export it at a higher price, then we immediately have an alternative. We are not isolated from the rest of the world, like North Korea. The appearance of this tendency cannot be excluded. It can be seen that the upward trend in prices has begun, which means that they must be limited.