New inflation driver
Belarus’ Agriculture and Food Ministry increased the fixed prices for agricultural products (crops), used for public needs to be harvested in 2012. In particular, the purchase prices of cereals (barley, rye, wheat, oats, buckwheat, millet, peas) increased by 27%, rape oilseeds by 55%, sugar beet by 50%, brewing barley by 74%, grain for alcohol production by 2.7 times. Moreover, purchase milk prices were increased by 75% on average and pork and beef by 100%.
The Ministry of Agriculture believes that since the new regulation sets fixed purchase prices, while previously only their minimal values were regulated, the price growth will be under the projected levels. Therefore it is difficult to say to what extent purchase prices have been increased and what impact it will have on the consumer inflation, but we can safely assume that the governmental attempts to keep the inflation down to 2-3% per month during the summer-autumn period will be unsuccessful.
According to Decree No. 221 of June 23rd, 2017, deadlines for the completion of foreign trade operations have been extended from 90 to 180 days for exports and from 60 to 90 days for imports. Delayed payments entailed a fine up to 2% of the transaction cost for each day of the delay, but could not exceed the total cost of the transaction. Most companies, when working with new counterparties, require a deferred payment for a period of three to six months. Due to the new regulation, violations are likely to reduce in number, so as the fines. Trade enterprises are likely to expand the assortment list due to the supply of new products in small lots, and the assortment list of exported Belarusian goods could expand, too. The new terms for completing foreign trade transactions would enable medium and small companies on the foreign trade market, exporters and importers are likely to grow in number and the geography of export-import operations could expand.