Eggs are experiencing a price drop in Russia.
In a recent announcement, Dmitry Vostrikov, executive director of the "Ruspordsoyuz" association, reported that as of July 6, the average retail price for a dozen eggs in federal retail stands at 88 rubles, a significant decrease from 120 rubles at the beginning of the year. This decline is a result of the restoration of the supply and demand balance following last year's shortage.
The price drop in eggs has been steady, with a 2.3% decrease in the first week of July alone. This is in addition to the 6% decrease in June compared to May. The price decrease is reflective of the dynamics of producer prices, suggesting a positive trend for consumers.
However, Vostrikov did not provide any forecasts or predictions about future egg prices or market conditions. He also did not mention any other products or industries that might be experiencing similar price drops.
Despite the decreasing prices, the expected price drops for certain products in Russia in 2025 are moderate rather than sharp. Annual inflation is forecast to decline to around 6.0–7.0% in 2025, down from higher levels earlier in the year. This indicates slower price growth rather than actual price drops in most consumer goods and services.
For retailers, this means they will face a challenging environment with moderate price increases rather than declines, limiting opportunities to expand sales through price cuts. The slow economic growth and moderate inflation suggest limited consumer purchasing power growth, putting pressure on retail margins and sales volumes. Retailers will need to manage costs carefully while navigating subdued demand.
Producers are likely to experience reduced pricing power due to slower inflation and overall economic stagnation. The IMF forecasts Russian GDP growth at only 0.9% in 2025 compared to previous growth rates. Slower growth stems from tighter economic policies, falling oil prices (a key revenue source), and supply chain challenges. Producers might face higher production costs constrained by limited demand growth and supply disruptions, impacting profitability.
Vostrikov emphasized that for stable pricing, poultry farmers must be confident in the profitability of their business. If retail networks force poultry farmers to sell eggs below cost, it could lead to negative consequences. The current average price of the most affordable chicken egg in federal retail is 67 rubles per dozen.
It's worth noting that eggs are a traffic-driving category for retailers, with retail prices being little different from purchase prices. The cost of an egg is primarily dictated by supply and demand, not retail.
In summary, while outright product price drops in Russia in 2025 are unlikely, the reduced pace of inflation weakens price growth, creating a tough environment for both retailers and producers focused on volume growth and cost control amid a sluggish economy and tight monetary conditions.
The decline in egg prices, as noted by Dmitry Vostrikov, indicates a positive trend for consumers in the finance sector, demonstrating the impact of producer prices on business operations. However, this price decrease is expected to be moderate in the future, with annual inflation forecast to be around 6.0–7.0% in 2025, implying a slower price growth rather than actual drops in most consumer goods and services.
