Explained: The connection between Ukraine war and butter thefts on rise in Russia

Butter thefts are on the rise in Russia – and many are blaming the Ukraine war.

There have been a spate of thefts in supermarkets across the country as the price of butter has skyrocketed over the past year.

Russia is also importing butter from the United Arab Emirates and Turkey to attempt to tamp down on soaring prices.

But what do we know about this crisis?

Let’s take a closer look:

What happened?

First, let’s take a look at the inflation in Russia when it comes to butter.

The price of a block of butter has risen by 25.7 per cent since December, according to the state statistics service.

As per The Telegraph, this is three times more than the official inflation rate of 8.6 per cent.

Reporters found shopping bills showed the price of a pack of “Brest-Litovsk” high-grade butter in Moscow has risen by 34 per cent since the start of the year to $2.47.

As pe_r Moscow Times_, food producer union Rusprodsoyuz has said that a kilogram of butter now cost $10.66 – a 20 per cent hike since January.

The steep price rise has prompted a spate of butter thefts at some supermarkets, according to Russian media.

According to Fortune, two masked men recently stole 20 kilos of butter from a dairy shop.

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In Moscow, two men were arrested after allegedly trying to steal 25 packets of butter form a supermarket, as per Kyiv Independent.

Some retailers have started putting individual blocks of butter inside plastic containers to deter shoplifting.

Russian independent news outlet Meduza reported that some supermarkets are now keeping butter in anti-theft casings usually used for caviar and premium alcohol products.

The authorities, who have gone to great lengths to try to ensure the war in Ukraine does not affect people’s daily lives, are watching closely.

Dmitry Patrushev, a deputy prime minister in charge of agriculture, said on October 23 that the government would monitor butter prices. He met major dairy producers and retailers and said imports were being stepped up.

Milk prices have soared too as have wages, interest rates, fuel and transport - all price inputs for butter.

As per The Telegraph, Soyuzmoloko, a group that represents Russia’s dairy producers, has blamed the higher prices on increased production costs and more demand for ice cream and cheese.

“[Ice cream and cheese] are some of the reasons why the butter and cream market is experiencing tensions,” Soyuzmoloko chief Artyom Belov told the Ura.ru news website Friday. “The segments consuming these products have grown significantly [and] are all factors that create additional demand for cream.”

Russia looks to import butter

Butter imports from Belarus are not sufficient so Russia is expecting a big shipment from Turkey, and even from Iran and India, Russian media reported.

Agricultural watchdog Rosselkhoznadzor said on Saturday that deliveries of butter from the UAE began on October 18. “Previously, there had been no deliveries of butter from the UAE to Russia,” it said in a statement.

The UAE has so far supplied 90 metric tons of butter to Russia, which also started importing butter from Turkey in October.

Russia is seeking to increase supplies of butter to stabilise prices and ensure availability for the domestic market.

Butter imports to Russia from Latin America fell to 2,800 tons this year from 25,000 tons in 2014, Rosselkhoznadzor said, citing Western sanctions are one of the factors behind declining deliveries.

“The reduction in the volume of butter imports from Latin America to Russia may be related to transport and logistics issues, sanctions, and the lack of agreements between businesses,” it said.

Belarus, the largest supplier of butter to Russia, has increased exports by 9 per cent this year to 110,000 tons.

Shoppers are unhappy

Reporters who visited three Moscow supermarkets found the shelves well stocked with different brands of butter at different price points.

But some shoppers grumbled.

“Specifically, butter has increased in price, some fruit and vegetables too. Potatoes and cabbage are very expensive,” said Elena, a Moscow pensioner. However, she had been able to find cheap cucumbers and buckwheat.

At another supermarket, Sergei Popov said he was worried.

“Every morning, we have to eat butter for breakfast. We buy milk, cheese, sausages, eggs and bread. And where has that 1,500 roubles ($15.35) gone? It’s very expensive. It is not clear why prices are going up,” he said.

Putin has made much of the resilience of Russia’s economy, and mentioned the relationship between ‘cannons’ and ‘butter’ after he appointed an economist, Andrei Belousov, to head the defence ministry earlier this year.

The $2 trillion economy has so far outperformed expectations: shortly after Putin sent troops into Ukraine in 2022, Western economists predicted its imminent collapse.

Instead, despite the harshest Western sanctions imposed on a major country, it grew faster than the United States and almost all major European countries.

Prices, though, are now rising - as are interest rates, which the central bank hiked 200 basis points to 21 per cent on October 25, their highest since 2003. The central bank forecasts inflation of 8.0-8.5 per cent this year.

As it fights against Western-backed Ukraine, Russia is spending more on defence than at any time since the Cold War – which is pushing up prices.

The Telegraph quoted draft documents in September as showing that Moscow is set to raise spending on defence to 6.3 per cent of GDP in 2025.

And it’s not just butter either.

The price of potatoes have risen by 50 per cent, while the price of garlic has increased by 30 per cent.

The cost of toothpaste is up 45 per cent, while car prices are also up by more than 40 per cent, as per data from Russia’s central bank.

Experts say the worst could be ahead.

“The Armageddon with butter is escalating; we wouldn’t be surprised if butter repeats last year’s situation with eggs,” economists on Russia’s popular MMI Telegram channel said as per CBC.ca.

Putin in 2023 had offered a rare apology over the increase in the prices of eggs.

“Simply put, Putin’s administration has prioritised military production over all else in the economy, at substantial cost. While the defence industry expands, Russian consumers are increasingly burdened with debt, potentially setting the stage for a looming crisis,” a group of Russia-Ukraine war experts wrote in a Fortune op-ed in August.

The International Monetary Fund forecasts growth of 3.6 per cent this year.

Jim O’Neill, the former Goldman Sachs chief economist who coined the ‘BRICs’ term in 2001, has questioned how sustainable the situation is.

“It’s all because of enormous Russian defence spending,” O’Neill said of the overall macro picture. “So I think the medium term outlook to long term outlook is quite bleak.

Russia’s central bank has forecast more pain for consumers.

“Prices for dairy products, especially butter, continued to rise faster in September. Increased cost pressures continued to pass through to prices for this category of goods,” it said in a report as per The Telegraph.

With inputs from agencies