Category: Market

The Bank of Russia kept the key interest rate unchanged and improved the country’s economic growth forecast at a regulatory meeting on Friday.

The key rate has been kept at 7.5% amid falling inflation and lower inflation expectations, as well as the swift growth of economic activity. The rate has remained unchanged since September of last year.

“Economic activity is growing faster than the Bank of Russia assumed in February’s forecast. This reflects both an expansion in domestic demand and the ongoing processes of transformation of the Russian economy… Growing domestic demand is supporting an improvement in business sentiment despite persistently challenging external conditions,” the regulator said in a statement.

The central bank also improved its inflation forecast for 2023. It had previously predicted prices to rise by 5-7%, but now anticipates a more moderate increase of 4.5-6.5%. The expectations for 2024 remained unchanged at 4%.

“Current rates of price growth have increased since late 2022 but remain moderate, including in the stable components of inflation. Inflation expectations of households are down. They nevertheless remain elevated, as do businesses’ price expectations,” it said.

The regulator noted that it now expects the Russian economy to grow by up to 2% this year as the country grows accustomed to operating under tighter Western sanctions. Under the previous scenario in February, the regulator envisaged a change in GDP from negative 1% to 1% for the year. The GDP growth forecast for 2024 and 2025 remained unchanged at 0.5-2.5% and 1.5-2.5%, respectively.

“This means that by the end of 2024 the Russian economy will reach the level of late 2021,” the regulator added, referring to the period that preceded the start of Russia’s military operation in Ukraine and the ensuing Western sanctions.

Source: Russia Today

Russian gold miners boosted output by 26.5% year-on-year in March, according to the latest data from the Federal State Statistics Service (Rosstat).

Compared to February, gold production jumped by more than 30%. The first quarter figure was 9.1% higher than in the same period of last year.

Meanwhile, the production of the key metals silver, platinum, and palladium in Russia rose by 14.1% in March in annual terms, Rosstat data showed.

The country’s bullion stockpile has also continued to grow over the past year, according to the Bank of Russia. Gold reserves jumped by 1 million ounces over the last year to 74.9 million ounces as of March 1, the CBR reported last month.

Demand for gold has been growing among the population as well, with Russians having bought more than 75 tons of investment gold bullion in 2022, according to the Finance Ministry.

Last March, the Russian government scrapped the 20% value-added tax on gold for individuals as people rushed to park their savings amid the sweeping Western sanctions. Several months later, the 13% income tax on profits from the sale of gold bars was rescinded as well. Since then, demand for the precious metal in the country has skyrocketed.

Source: Russia Today

The success of Turkish defense products in warzone is increasing their demand, head of the country’s missile producer Roketsan said on Saturday. Speaking at TEKNOFEST, Trkiye’s premier aerospace and technology festival, Murat Ikinci said Turkish defense exports are currently around $4 billion annually, but the sector is making efforts to raise the figure to up to $20 billion rapidly. There is a strong demand for Turkish defense products, he told Anadolu, adding that around 35% of Roketsan’s income comes from exports and the firm aims to raise the figure to over 50%. That income, he said, is used for research and development activities. He said Roketsan is participating in TEKNOFEST to increase young people’s interest in technology, adding: “One of the things we try to highlight here is aviation and space studies … we have a duty to move Trkiye to space independently.” One of the two people selected to be space travelers from Trkiye is Tuva Cihangir Atasever, a system engineer at Roketsan, he recalled. Five-day TEKNOFEST began on Thursday at Istanbul’s Ataturk Airport and is continuing in full swing. Thousands of visitors are pouring in for a glimpse at latest offerings from tech giants and defense companies from Trkiye and around the world. It also features events including concerts, workshops and airshows.

Source: Anadolu Agency

Inflation in Greece has hit online supermarkets too, a new survey has revealed. Similar to the trend in physical supermarkets, online supermarket basket is shrinking as price increases force consumers to order fewer products, the Kathimerini newspaper reported on Saturday, citing a recent survey by Convert Group. Hence, the share of private label products is increasing. According to the survey, the turnover of online supermarkets in the first quarter of 2023 was pound 76 million ($85 million), 10% more than the first quarter of 2022. However, it pointed out, this increase was mainly caused by the price increases, noting that the number of products that consumers purchase is on a decline. ‘Compared to last year, the number of items in the average basket decreased in January-March 2023 by 10%,’ it said.

Source: Anadolu Agency

Russian Foreign Minister Sergey Lavrov said on Saturday that over the past three decades, the shares of the Group of Seven (G7) countries in the global economy have significantly decreased, while the influence of emerging markets is growing steadily. China, in particular, has become the world’s leading economy in terms of purchasing power parity, “skillfully combining market tools with government regulation,” Lavrov told the World Online Conference on Multipolarity. “We are witnessing the continued transformation of the structure of international relations. A striking example of multipolar diplomacy is the work of multilateral associations of a new type such as the SCO (Shanghai Cooperation Organization) and BRICS (Brazil, Russia, India, China, South Africa),” he said. Lavrov noted that the SCO and BRICS “bring together member countries with different political and economic systems, with distinct values and civilizational platforms, which effectively cooperate in various fields.” “In fact, BRICS can be visualized as a kind of cooperative net thrown over the old North-South and West-East dividing lines. It is no coincidence that more and more countries in the Global South are striving to establish ties with these associations or become their full members,” he said. Lavrov stressed that the trend toward multipolarity in the world is inevitable and will only intensify. “And those who do not understand this and do not follow this trend will lose,’ he said. The diplomat urged all key global centers to combine efforts in response to confrontation, imposed by the West, cross-border challenges, and threats. “Everyone needs to recognize the irreversibility of the emergence of a more equitable polycentric international system. It is in our common interests to ensure that the multipolar architecture is based not on a ‘balance of fear,’ but on a balance of interests, on universally recognized norms of international law, and on mutually respectful dialogue between different civilizations, religions, and cultures,” he emphasized. According to the minister, Russia “remains at the forefront of international efforts to strengthen the multipolar, legal, and democratic principles of interstate communication. “To this end, we will continue our efforts at the UN, including as part of the Group of Friends in Defense of the UN Charter. We will certainly continue to closely coordinate our steps with our numerous friends, allies, and countries that share our views,” he said.

Source: Anadolu Agency

Raw sugar prices reached an 11-year high this week, trading data showed. Analysts have pointed to adverse weather and a drop in output by major producers as among the reasons behind the spike.

The cost of May futures on the Intercontinental Exchange (ICE) surged past $0.27 per pound on Thursday, the highest price since mid-2011. While prices have since somewhat subsided, they remain well above the February peak of $0.22 per pound and are nearly 40% up on a year-to-date basis.

Analysts have linked the price rise with growing global demand, which is still recovering after the Covid-19 pandemic, but have also noted a drop in output and the lower production outlook in major sugar-producing countries as driving prices upwards.

As an example, analysts cited last year’s drought which resulted in a lower output of European beet crop. Elsewhere, heavy rains in Brazil, the world’s largest producer of sugar cane, are slowing the start of this year’s harvest, which was due to begin in April. India, the second largest sugar supplier, recently cut its production estimates by nearly 3% for the current crop year, also due to unseasonal rainfall in one of its main sugar-producing regions.

“In recent weeks, the Asian cane-crushing season has started to wind down and we have seen large downward crop revisions in the key producing countries, most notably India, Thailand, China, and Pakistan,” John Stansfield, a senior sugar analyst at commodity data platform DNEXT, told CNBC.

Girish Chhimwal, an analyst at SandP, predicts that the sugar market could become “very volatile” in the coming months, depending on Asian monsoon rainfall.

“Sugar fundamentals are quite bullish for the prices to remain elevated in the short to medium term… Prices should trend towards staying elevated in the 21 to 24 cents per pound range,” he was cited as saying.

Analysts have also warned that elevated costs on raw sugar will inevitably drive up global prices on candy and sugared drinks.

Source: Russia Today

Brussels may ban certain EU exports to countries that are believed to be re-exporting sanctioned goods to Russia, in a bid to enforce the existing sanctions against the country, the Financial Times reported on Friday, citing sources close to the discussions.

According to the report, a legal mechanism would allow Brussels to identify sanctioned products that end up in Russia through third parties, and countries that resell them.

The European Commission would then issue official warnings to these states. If those are not heeded, Brussels would then add the names of targeted products and destinations to export controls.

The measure may be included in the 11th package of Ukraine-related sanctions against Russia, sources claim.

Some member states, however, have expressed concern over how the measure may affect their trade relations with third countries, as well as how such measures comply with global trade rules, even if they are strictly targeted and temporary, sources say.

“It will lead to quite some discussion in the EU – over whether we are comfortable doing that. How do you avoid the unintended side effects of pushing certain countries in a different direction to where you want them to go? You have to be very careful on how you use carrots and sticks,” one of the sources told the news outlet.

Source: Russia Today

Polish Prime Minister Mateusz Morawiecki has urged the European Commission (EC) to check if Ukrainian food exports meet EU standards as Warsaw seeks to protect its economy from “destabilization” caused by an influx of cheap goods from Ukraine.

He announced on Friday that Warsaw would submit a request to the EC demanding an inspection of a range of goods such as poultry, eggs, and dairy products.

Earlier, the Slovak authorities had banned the processing and sale of Ukrainian grain after discovering a dangerous pesticide in a shipment.

“We want to reliably verify the impact of these products on the Polish market in the last few months and the risks related to the destabilization of the Polish market in the future,” Morawiecki was quoted by the radio station RMF24 as saying.

The announcement comes at a time when EU ambassadors are expected to vote on extending duty-free trade with Ukraine, which expires on June 5.

Last year, the EU lifted tariffs and quotas for Ukrainian agricultural produce in order to enable grain from Ukraine to be shipped onward to global markets. However, much of the supply has ended up getting stuck in Eastern European countries. The glut of cheap produce has left EU farmers struggling against what they view as unfair competition.

Earlier this month, Poland, Hungary, Romania, Slovakia, and Bulgaria unilaterally blocked Ukrainian food products from their markets. Last week, the European Commission offered €100 million ($109 million) in support for farmers in the five member states, of which €40 million will reportedly be allocated to Poland.

The EC also agreed to introduce a ban on imports of wheat, corn, rapeseed, and sunflower seeds from Ukraine until June. However, the agriculture ministers of the five countries demanded that the list of banned goods be expanded.

Source: Russia Today

The European Commission on Friday struck an agreement with five EU member-states to help clear the supply glut caused by Ukrainian agricultural imports. The announcement was made on Twitter by EU trade chief Valdis Dombrovskis.

“The European Commission has reached an agreement in principle with Bulgaria, Hungary, Poland, Romania and Slovakia regarding Ukraine agri-food products. We have acted to address concerns of both farmers in neighboring EU countries and Ukraine,” Dombrovskis wrote on the social media platform.

According to the official, the key elements of the new deal include the withdrawal of unilateral import restrictions previously placed by the countries on Ukrainian agricultural produce, a €100 million ($110 million) support package for the member-states’ farmers, and “emergency safeguard measures” for four Ukrainian staples – wheat, maize, rapeseed and sunflower seeds. Dombrovskis did not elaborate on what these emergency measures would entail, but sources claim that the imports of these crops into the five Eastern European countries will likely be blocked unless for transit.

European Commission President Ursula von der Leyen welcomed the deal, saying that it would help guarantee the transit of Ukrainian produce.

“This agreement preserves both Ukraine’s export capacity so that it continues to feed the world, and the livelihoods of our farmers,” she tweeted.

In June last year, the EU lifted tariffs and quotas for Ukrainian agricultural imports for one year in order to enable grain from Ukraine to be shipped to global markets amid the conflict with Russia. Many of the shipments, however, ended up in Eastern European countries, flooding their markets with cheap produce and sparking protests among local farmers.

Earlier this month, Poland, Hungary, Slovakia, and Bulgaria unilaterally banned agricultural products imported from Ukraine in bid to protect their markets. While Romania had not imposed its own import ban, it joined the other four in urging Brussels to find a solution to the glut of Ukrainian produce. Import bans were deemed “unacceptable” by Brussels, as they undermined the bloc’s single market rules.

The news of a deal on Ukrainian food imports followed a decision by EU ambassadors to extend Ukraine’s tariff-free access to the bloc’s market by another year. However, the extension is still subject to formal approval by the European Parliament and EU countries in the coming weeks.

Source: Russia Today

Ukrainian authorities have sent notes of protest to the Polish and EU embassies in Kiev, decrying restrictions on imports of the country’s agricultural products to the bloc. The move was announced on Saturday by Ministry of Foreign Affairs spokesman Oleg Nikolenko in a Facebook post.

According to Nikolenko, Ukraine considers the restrictions “utterly unacceptable.”

“Such restrictions, for whatever reason, do not comply with the Ukraine-EU Association Agreement and the principles and norms of the EU Single Market,” Nikolenko insisted.

Earlier this month, Poland, Hungary, Slovakia, and Bulgaria unilaterally banned the import of agricultural products from Ukraine in a bid to protect their domestic markets, which have been overflowing with cheap produce. Romania did not impose an import ban, but joined the calls for Brussels to free the region of Ukrainian goods.

The spokesman further claimed that Kiev has “all legal grounds” to immediately resume its exports to Poland, Romania, Hungary, Slovakia, and Bulgaria and continue uninterrupted transit of all Ukrainian products to other countries both inside and outside the EU.

“The Ukrainian Foreign Ministry urged its [EU] partners to find a balanced solution based on EU legislation, the Association Agreement, and in the spirit of solidarity,” he added.

The European Commission and the five member states struck a deal on Friday, following two weeks of discussion, which involves replacing individual bans placed by each country on Ukrainian imports with “emergency safeguard measures” for four major staples – wheat, maize, rapeseed, and sunflower seeds.

Source: Russia Today