Azerbaijan, Baku / Trend corr. U.Ismaylova / A decision made by the Cabinet of Ministers of Azerbaijan to allocate additional subsidies to grain manufacturers cannot prevent an increase in the cost of bread, Vusal Gasimli, an expert at the Economic Research Centre, said on 14 November.
Under the decision by the Cabinet of Ministers, AZN 40 will be allocated to grain manufacturers for each hectare sowed. The funds will be allocated from unused funds provided for grain producers for fuel and engineering oil in the amount of AZN 80mln.
According to Gasimli, the decision by the Cabinet of Ministers was the second step of the Government to regulate bread prices. Taking into consideration that the first step which envisaged the abolishment of VAT on grain did not have any effect we should not expect quick results from the second one.
Recently an increase in the price of grain was seen in world markets which were connected to poor weather. Countries which export grain to Azerbaijan also increased prices.
Azerbaijan mainly imports grain from Russia and Kazakhstan. The import of grain from Russia to Azerbaijan was suspended after Russia imposed an additional €22 on export.
According to the head of the Free Entrepreneurs Union of Azerbaijan, Eyyub Huseynov, the decision by the Cabinet cannot prevent an increase in the price of bread. Since the beginning of the year the price of bread has increased by 25% and is expected to reach 30% by the end of the year. "I consider the planned AZN 40 for grain producers for each hectare sowed too little," Heseynov said.
The head of the National Confederation for Entrepreneurs of Azerbaijan, Alakpar Mammadov, has quite another opinion. According to Mammadov, the planned AZN 40 for each hectare sowed will positively affect development of entrepreneurship. The allocated sum may cause a decrease in the price of raw materials which may lead to a reduction in the price of grain.
"Inspections in baker's revealed that in spite of everything recently they saw decrease in the weight of a loaf of bread but now there was an increase in the weight," Mansim Babayev, head consultant of standards and quality at the State Standardization Service, said.
Some 1.9mln tons of grain was produced in Azerbaijan, some 127,000 tons are used monthly throughout the country. Taking into consideration the numbers there will be no grain deficit in Azerbaijan, Sabir Valiyev, the head of the Department of the Agriculture Ministry, said.
The demand for grain in Azerbaijan made up 1.5mln tons.
One loaf of bread is AZN 0.30 in Azerbaijan.