Executive director of the Oil and Fat Union of Russia Mikhail Maltsev explained when mayonnaise and sauces will stop rising in price

Published Apr 9, 2021

Tridge summary

The article explains the significant price increase in mayonnaise and sauces in Russia, which is attributed to a sharp rise in the cost of raw materials, especially sunflower oil, which makes up over half of these products' cost. The Oil and Fat Union of Russia's executive director, Mikhail Maltsev, points out that while manufacturers have absorbed most of these increased costs, they have received partial compensation from the state to limit price hikes for consumers. With global oil prices stabilizing and an anticipated ruble strengthening, wholesale sunflower oil prices are expected to level out. Additionally, upcoming measures such as an increased export duty on sunflower oil seeds and an expansion of sunflower cultivation areas are aimed at further controlling prices and ensuring the availability of affordable products.

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Original content

The correction of prices for mayonnaise and sauces should have happened a long time ago and was caused by an increase in the cost of raw materials - in general, it has risen in price by one and a half times over the past year, explained Mikhail Maltsev, executive director of the Oil and Fat Union of Russia. According to him, wholesale prices for oil are tied to the cost of raw materials, which is more than 95% of the cost of production. Accordingly, those products that use sunflower oil in their composition (and in mayonnaise its 67% on average) could not help but rise in price. Many other ingredients have also risen in price - for example, packaging. However, until now, manufacturers have held back the growth of selling prices. Now manufacturers receive compensation from the state for containing prices on store shelves (no more than 110 rubles per liter). They are allocated 10 rubles per liter from the reserve fund for the production of bottled oil for retail. But this only ...

Source: Oilworld