At a farm near Moscow, Indian guest workers are planting potatoes and cabbages—an effort closely watched by Russia's central bank as food inflation remains a major concern.
Food makes up about 40% of Russia's inflation basket, compared to just 14% in the U.S. Soaring prices for staples like potatoes have kept pressure on monetary policy, despite a recent rate cut to 20%—still among the highest since 2003.
Potato prices have tripled since last year due to a 12% drop in crop yield, with new crop potatoes now selling for up to 120 roubles ($1.53) per kilogram—higher than U.K. supermarket prices. Prices for other staples like onions, cabbage, and carrots have also jumped.
"People are not buying smartphones—they're buying food," said Central Bank Governor Elvira Nabiullina, highlighting how rising grocery costs are fueling inflation expectations. Russian households spent 35% of their income on food in April, the highest in five years.
Source: www.reuters.com