Flour prices expected to go up - expert

A news conference devoted to the increase of flour and bread prices was held in Yerevan on Monday.

Ivan Mosoyan, the director of the flour-importing company Mancho Group, who was expected to make his comments on this occasion, changed his mind at the last moment and didn't attend the discussion.

Instead, the chairman of the Union of Consumers, Armen Poghosyan, voiced his concerns over the issue.

"The prices on bread have gone up by 20 drams," he said, adding that such increase is seen as a huge burden on the family budget in monthly terms.

"What we need today is full information on wheat import volumes, prices, interest rates and taxation procedures. If all this were properly controlled we wouldn't be facing the anxiety that has brought us together here," he stressed.

Poghosyan further spoke of the Committee for Economic Competition, saying that it didn't apply proper sanctions as a body in charge. He said the existing situation resulted from a lack of control that made many entrepreneurs increase prices on wheat products to gain extra profits.

Speaking further on the issue, economist Samvel Avagyan said wheat prices on the international market are not expected to go up this year provided the agriculture sector does not face a crisis. In the short-run, however, he predicted increase of flour and bread prices in Armenia.

In that connection he said the flour price on the international market went up to $300 (per ton) last week, while French flour sold for $350. Ha added that such increase also affected the South Caucasus region as the Armenian exporters who purchase flour from mediatory companies at Poti seaport have to pay $400 per ton of flour instead of the $300-$350 they paid last year.

"If Armenia wishes to protect itself from foreign markets' influence, it has to follow Russia's example and enlarge its state reserves. Today we have 50 tons of flour in our reserve which is very little and should be saved for a 'rainy day'. Private companies too, have some flour in their reserve, but the state has no levers to induce them to keep its prices down. Armenia has to enlarge its stock, having a quantity of flour that can last at least 3-4 months," the expert said.