BOFIT Viikkokatsaus / BOFIT Weekly Review 2018/48
Data from the beginning of November show Russia’s grain harvest this year was about 15 % smaller than last year. Last year’s harvest, however, was exceptionally large due to favourable summer grain-growing conditions. Compared to 2016, this year’s harvest was only a few per cent smaller. The sugar beet crop was about 10 % smaller than last year, while potato and other vegetable crops matched 2017 levels.
The area of land under cultivation has expanded in recent years, but arable land is unevenly distributed across Russia. Wheat and sugar beet cultivation is concentrated in the steppe that stretches from the Black Sea to Siberia, while potato and rye cultivation succeeds at more northern latitudes. Also crop composition has changed since the breakup of the Soviet Union with the traditional rye and buckwheat crops replaced increasingly by maize and wheat. In terms of weight, two-thirds of Russia’s grain crop is now wheat. Wheat is exported especially to countries in the Middle East.
The size of harvests impacts food prices and thus the general price level. Foodstuffs represent 37 % of Russia’s consumer goods basket used for price indexing. Compared to many other countries, this is a large share. Thus, the large harvest last autumn slowed down slightly the rise in consumer prices during last winter and spring. Accordingly, this year’s smaller autumn harvest can be expected to slightly accelerate inflation over coming months.