(Bloomberg) -- Russia has seen a surge in prices for butter as the country grapples with finding new supply routes to compensate for its wartime isolation from the West.
Government officials met this week with dairy producers and reached agreement on tracking butter output in an effort to ease prices that have jumped more than 25% this year, according to Federal Statistics Service data.
That butter is increasingly unaffordable illustrates how Russia’s break with the West continues to affect the country’s economy — and food security. The nation of more than 140 million people is a key global agricultural producer itself, but remains dependent on imports for certain crucial products, including chickens, some seeds and various fruits.
One quarter of Russia’s butter consumption comes from abroad, according to data from the industry’s lobby group. Since President Vladimir Putin started his full-scale invasion of Ukraine in February 2022, many traditional sources for the creamy product, like New Zealand and Latin America, suspended trade for reasons varying from punishment to new hassles with payments and logistics stemming from sanctions.
That’s turned countries like Belarus, India and Iran into important suppliers. This week, Russia started to buy butter from Turkey, according to the state-run Tass news service.
The reworking of supply chains has coincided with an overheating war economy that has spurred an increase in output of cheese and ice cream. Producers use the same cream to make those products, which helped drive up the price of butter.
Russians have seen prices rise across the economy. Annual price growth stands at about 8.6%, according to the latest data. Last week, the Bank of Russia raised its key interest rate to a record high of 21% and signaled future tightening was possible as policymakers grapple with persistent inflation.
Russians have faced rising prices for other food staples as well, including some types of meat and potatoes. The cost of the latter has grown nearly 55% this year due to a smaller harvest and fewer imports.
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