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WHY DOESN'T THE PRICE OF BREAD DECREASE?
Tert.am
12:05 08.10.09
An increase in the price of consumer goods in Armenia is usually
explained by external factors. Market vendors and producers respond
quite quickly to price increase in the international market for grains,
sugar, vegetable oil and butter -- sometimes even by the next day.
>From time to time, the prices of these types of goods fall in Armenia's
market, but, as a rule, Armenian market participants overlook this
detail.
The same is presently happening in the wheat market. When, in the
first half of 2008, the price of grains rose in international market,
companies Manana Grain (their portion in the market: 36.77%) and Salex
Group (portion: 42.05%), which hold a dominant position in the wheat
flour market, responded to the price increase quite quickly and as
a result, the price of bread rose.
Examining the bread, flour and wheat markets, the State Committee of
the Republic of Armenia for the Protection of Economic Competition
blamed the bread manufacturing factories for the rise in the cost of
bread, but not the flouring mills, which actually increased the cost
of flour.
During eight months this year, the average price for a tonne of wheat
exported from Russia was 163 USD (whereas in 2008, it was 282 USD
per tonne). According to the State Revenue Committee's latest data
(January-June), average customs price per tonne of wheat imported
into Armenia was 253 USD instead of last year's 263 USD, reports
Russian paper Commersant.
That is to say, though the price of wheat exported from Russia
dropped considerably this year, in Armenia, the drop was not as
considerable. However, when prices increase, the Armenian market is
quick to follow suit and raise its prices.
It should also be taken into account that the two major flour mills
in Armenia, one in the town of Baghramyan (belonging to businessman
and MP Samvel Alexanyan) and the other in village of Armash (owned
by wheat giant Manana Grain) don't purchase flour from the villagers
but use f The drop in the price of flour in Russia and the unchanging
prices in Armenia's domestic market must worry the Committee, since
under these conditions, abuse of one's dominant position and agreements
which are potentially against competition are possible.
Tert.am
12:05 08.10.09
An increase in the price of consumer goods in Armenia is usually
explained by external factors. Market vendors and producers respond
quite quickly to price increase in the international market for grains,
sugar, vegetable oil and butter -- sometimes even by the next day.
>From time to time, the prices of these types of goods fall in Armenia's
market, but, as a rule, Armenian market participants overlook this
detail.
The same is presently happening in the wheat market. When, in the
first half of 2008, the price of grains rose in international market,
companies Manana Grain (their portion in the market: 36.77%) and Salex
Group (portion: 42.05%), which hold a dominant position in the wheat
flour market, responded to the price increase quite quickly and as
a result, the price of bread rose.
Examining the bread, flour and wheat markets, the State Committee of
the Republic of Armenia for the Protection of Economic Competition
blamed the bread manufacturing factories for the rise in the cost of
bread, but not the flouring mills, which actually increased the cost
of flour.
During eight months this year, the average price for a tonne of wheat
exported from Russia was 163 USD (whereas in 2008, it was 282 USD
per tonne). According to the State Revenue Committee's latest data
(January-June), average customs price per tonne of wheat imported
into Armenia was 253 USD instead of last year's 263 USD, reports
Russian paper Commersant.
That is to say, though the price of wheat exported from Russia
dropped considerably this year, in Armenia, the drop was not as
considerable. However, when prices increase, the Armenian market is
quick to follow suit and raise its prices.
It should also be taken into account that the two major flour mills
in Armenia, one in the town of Baghramyan (belonging to businessman
and MP Samvel Alexanyan) and the other in village of Armash (owned
by wheat giant Manana Grain) don't purchase flour from the villagers
but use f The drop in the price of flour in Russia and the unchanging
prices in Armenia's domestic market must worry the Committee, since
under these conditions, abuse of one's dominant position and agreements
which are potentially against competition are possible.