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Author`s name Michael Simpson

Foodstuff Panic Grips Ukraine

Governmental regulation of prices for foodstuffs may be introduced in the country
Bad weather conditions in winter and at the beginning of summer demonstrated that Ukraine shouldn't hope for a good harvest. Although the Ukraine Agrarian Policy Ministry reports that resources of Ukraine's bread grain are quite enough to avert a bounce of prices for flour and bread, prices for bread have already gone up (the bread price went up 20% in the city of Dnepropetrovsk; bread went up in price in 22 regions of Ukraine as well).

The population of Ukraine is panic stricken; it has immediately rushed to buy up cereals and macaroni. Extraordinary measures taken by local authorities in some parts of Ukraine reveal that the scale of the panic is considerable enough. Governmental price regulation has been introduced in Crimea; prices for flour, bread, bakery, cereals and sugar are subject to the regulation. It is not ruled out that the state regulation of prices will be introduced on the whole territory of Ukraine. 

The Ukraine Anti-Monopoly Committee made a statement saying that the growth of prices for foodstuffs was caused not by deficit of food but by the panic among the population of large cities of the country. It adds that the panic was incited by unfair businessmen. Specialists of the Committee explain there are no economic reasons for price growth. It is not ruled out that the situation is a result of a plot hatched by unfair participants of the market pursuing super profits. Territorial departments of the Anti-Monopoly Committee are given an instruction to inspect markets with a view to discover and suppress violations of the competition law, the press-service of the Committee reports.

The Chairman of the Ukraine Anti-Monopoly Committee Alexey Kostusev calls actions of illicit dealers a robbery, not business; he promised that tough measures will be applied to such dealers and asked the population not to yield to the panic and trust the government that controls the situation.

Ukraine's First Deputy Prime Minister, Minister of Finance Nikolay Azarov explains the incredible demand for foodstuffs with "serious miscalculations" committed by the Ministry of Economy and the Agrarian Policy Ministry. He adds, the above mentioned ministries were aware of the tendencies and should have taken necessary proactive measures but failed to. According to Nikolay Azarov, the ministry holds "all necessary resources, including financial ones to settle the problem". 

The first deputy prime minister warned illicit dealers of tough measures that will be taken against them. While visiting the Kharkov region Ukraine President Leonid Kuchma said he was sure Ukraine would always have enough bread. According to the president, bad weather is not a tragedy at all; at the same time he criticized the government that, as he stressed, must take care about a sufficient governmental reserve but not blame people for speculations. 

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