Azerbaijan, Baku, May 8/ Trend , U. Ismayilova/
Canceling exemption of wheat import from the value added tax that took place in 2007 with a prolongation of a year, will not lead to rise in oil prices, the Economic Development Ministry said.
The wheat import was first exempted from VAT in July 2007 which enabled bread producers to buy each ton of wheat $50 cheaper.
The ministry said some media outlets report that canceling exemptions will lead to a rise in bread prices.
"Given the fact that bread is a strategic product in Azerbaijan, the ministry exercises control over bread prices. The daily monitoring by ministry's agencies indicated no price rise."
"Furthermore, the ministry regularly holds meetings with wheat importers and bread producers and debates factors that impact bread prices. The last meeting was held on May 2. The meeting focused on canceling privileges on VAT for wheat import and its impact on rise in bread prices."
"It was revealed during the discussions that resuming VAT for wheat import will not impact cost and profitability of bread production to a great degree. The rise in bread prices in outlets of retail bread sale is unreasonable."
"Given the fact that bread producers are expected to make greater profit this year and the cost of grain production is expected to increase slightly, one can say with confidence that there is no reason for rise in bread prices."
Azerbaijani Agriculture Minister Ismat Abbasv said on May 6 that the wheat production is expected to grow by 2.1 million this year tons as sown area was extended by 800 hectares in 2008, which is a record indicator.
"Therefore, it is unreasonable to predict price rise or deficit," the minister said.
Azerbaijan's annual need for bread-grain is 1.5 million tons.
Do you have any feedback? Contact our journalist at: [email protected]