September 9 2004, 14:50 UNIAN

Ukraine's Antimonopoly Committee argues that rich grain harvest allows lowering bread prices

IntelliNews - Ukraine Today, Kiev, Ukraine

According to the Antimonopoly Committee's press service, the body is going to examine all facts of refusing to lower bread prices in regions. It argues that rich grain harvest allows lowering the prices due to significant flour price drop (by at least 10%). The share of flour in bread cost is 70-80%.

But despite all this, bread prices stay at the same level. Besides, administrative barriers for grain shipping out of initial production regions attracted attention of the committee.

In particular, such orders can be observed in Dnepropetrovsk, Zaporozhie, Kirovograd, Poltava, Sumy and Crimea regions. Antimonopoly Committee officially notified local authorities that it is inadmissible to restrict competition on the grain market. The situation when flour price falls and bread price does not change is abnormal. Bread is a socially important product, so it should be cheap if it is possible.

------------------------------------------------------------------------

IntelliNews Comment: In our view, the situation on the grain market is not as simple as it might seem. Bakers want to compensate last year's losses due to poor harvest and high costs. But the forthcoming presidential elections are causing a multitude of populist moves. Lowering bread prices may attract additional votes for the candidate from current authorities PM Viktor Yanukovich.