Food prices are breaking records: Crimea talks about ceasefire and lifting of sanctions

In recent months, the occupied Crimea has seen a significant rise in prices for basic foodstuffs. Residents say that such a sharp increase has only been seen since the annexation of the peninsula in 2014, OstroV reports.

“Recently, prices for almost all products have risen: from milk and butter to meat and fish. When did it ever happen that a 180-gram pack of butter costs 320 rubles? I used to buy it for 250 rubles last year. We have seen food prices rise many times over the past ten years, but something strange is happening now. It seems like sanctions were imposed a long time ago, they say that our economy is growing, that we are not dependent on the dollar, sanctions and so on, but in reality, all we see is rising prices. If you don’t fight and don’t get millions of rubles, you may as well lie down and die,” Kateryna, a resident of occupied Simferopol, told OstroV.

Negotiations and compromises

Prices in Crimea after its annexation have always been higher than in neighbouring Russian regions. Residents have repeatedly told OstroV about how Muscovites and Petersburgers who came to the peninsula were shocked to find food prices higher than in the capital. The occupation authorities explained this by the complicated and expensive logistics.

There was hope for the Kerch Bridge, which connected Crimea and mainland Russia, but prices for goods have skyrocketed since its opening. The local occupation authorities kept repeating the mantra of complicated logistics. Later, however, they added the reasons for covid and a “special military operation”.

“We constantly hear some excuses. It’s sanctions, or Ukraine has blocked something, or logistics, or the coronavirus, or the war. Salaries are average, and the shortage of staff, especially in the public sector, is terrible, but prices can be raised uncontrollably. On TV, I see stories about economic growth, but in supermarkets, I see only rising prices. Last week, there was a huge queue of pensioners in one of the social shops in the neighbourhood, all of whom were buying for the future because they were afraid of a sharp jump in prices. I talked to a neighbour and she told me that there were rumours that prices would rise even more in winter due to the rise in the dollar and new sanctions,” Raisa, a resident of Sevastopol, told OstroV.

The occupation authorities have already tried to combat price increases. In the spring of 2024, a “memorandum” was signed between the “government of Crimea”, food producers and sellers to stabilise prices for essential foodstuffs.

The agreement included 30 items of socially important products: eggs, sugar, flour, potatoes, etc.

“The price reduction will be up to 30 per cent for certain items. The wholesale trade system entities also undertake not to exceed the trade margin by more than 5 per cent,” the head of the occupation administration of Crimea, Serhiy Aksionov, joyfully announced at the time.

According to eyewitnesses, some stores did indeed have products with blue price tags and the word “memorandum”. However, a limited number of such products are displayed, often of poor quality.

“Recently, I wanted to buy potatoes at a social price. I came to the store, found a blue price tag (30 rubles per kilogram), looked at it, and it was all wrinkled and almost rotten, I wouldn’t even give it to pigs in a village. Next to it is the same potato, but in good condition, and its price is already 67 rubles. The same variety and size. And this happens very often. Eggs and butter at social prices are impossible to find, with price tags hanging on empty shelves. So it’s all complete nonsense with social prices, some kind of incomprehensible PR stunt,” Kateryna explained.

Photo from the OstroV website

Against this backdrop, the statement by the “speaker of the state council of Crimea” Volodymyr Konstantinov about peace talks on the basis of a compromise with the mandatory lifting of anti-Russian sanctions is noteworthy.

“The situation on the frontline is not such that we can talk about Ukraine’s unconditional surrender. It is possible when the conditions are dictated by the winner, and it does not look like that today. So, there will be negotiations based on a compromise, which is still being discussed.

It is clear that they will never recognise Zaporozhye, Kherson, Donetsk and Lugansk. So, it will remain in a kind of suspended status. Our demands for recognition do not look realistic now, so it’s the Korean option.

But lifting the sanctions is very important. No matter all the blusting, it is important for the country to breathe, to nourish our economy. We have gained a good pace of import substitution, and within 4-5 years we will become a technologically independent country. But a short break will not hurt us at all,” Konstantinov said.

“Logistics issues”

As of October, the annual increase in food prices in Crimea was 9.76 per cent, and in Sevastopol – 11.15 per cent, which is higher than the Russian average (9.03 per cent).

According to local media, “chocolate inflation” in Sevastopol and Crimea was higher than in other Russian regions. Prices for chocolate, marshmallows, marshmallows, chocolates, honey and jam on the peninsula increased by 9.4 per cent over the year (with prices for sweets rising by 1.8 per cent in the Astrakhan region, 4.1 per cent in the Rostov region and 6.7 per cent in Kuban).

“Prices for holiday goods in Sevastopol were changing in the face of rising producer costs. Businesses shifted prices of goods to higher costs, such as labour costs in the face of staff shortages. Agrarians also increased the cost of remedies, fertilisers, and logistics, which led to an increase in the cost of fruit leathers, marshmallows and jam,” the Russian Central Bank said.

But butter has risen in price the most in Crimea.

According to official data from Krymstat, the price of butter rose by 41 per cent over the year (from 933 to 1316 rubles per kilogram), milk by 22 per cent (from 312 to 380 rubles per litre), cheese by 11 per cent (from 469 to 520 rubles per kilogram), and so on. But in reality, according to residents, the price increase was even more significant.

According to them, a kilogram of butter now costs about 1,500 rubles at retail, while a regular pack (170-200 g) costs 320-370 rubles.

“In recent months, neither my wife nor I have received a salary increase at work, and prices have skyrocketed during this time. If a year ago we spent about 20,000 rubles a month on groceries, today it’s 27-30,000. We haven’t started eating better, but we have to limit buying new clothes, going on holiday, going to restaurants. And all we hear is that we have expensive logistics here, that raw materials are getting more expensive, that there is a shortage, sanctions, the ruble exchange rate, etc.,” said Serhiy, a resident of Yevpatoria.

According to Natalia Skoriukova, director of the Sevastopol agriculture department, producers are experiencing price increases due to higher costs, including fuel and imported spare parts, and a poor harvest due to unfavourable weather conditions.

Crimeans complain that the cost of petrol on the peninsula is significantly higher than in Russian regions and continues to rise.

“Why do mainland prices differ from ours and is there any way to influence them? The price of petrol is unacceptable and constantly rising. It’s hard,” a resident addressed the Sevastopol “governor” during a “live phone-in” in early December.

The head of the occupation administration of Sevastopol, Mikhail Razvozhayev, admitted that prices were inflated “due to security measures”.

“I can only repeat the main points – they are well known. First, petrol prices are rising across the country. In Crimea and Sevastopol, it is higher than in the mainland due to logistical issues. Due to security measures, which I think every Sevastopol resident is aware of, logistics has become more complicated – now deliveries are mostly made through a corridor through our historic territories. And this adds to serious transport costs,” Razvozhayev said.

Forecasts and expectations

At the end of October 2024, the Russian Central Bank raised its key interest rate to 21 per cent, a record for the last ten years.

Against this backdrop, Crimean media predict a rise in prices and a drop in the growth rate of the Russian economy next year.

In addition to the high key interest rate, Russians will face a tax increase in 2025.

“There is little talk about this, but from 2025, a new tax reality is coming, a serious tax increase on small businesses, a significant increase on medium and large businesses – all this will affect the economy, there are no miracles, so the consequences of this step will definitely be clear by mid-2025. My prediction is that they will be more negative than many people assume,” said Ildar Husainov, CEO of the Russian company Etazhi.

Crimean residents also do not expect inflation to slow down next year and prices to return to normal.

“We are adapting. To some extent, we have been doing this for more than a decade. Although everyone criticises the local authorities for doing a poor job, no one says anything about Putin or the government, no one criticises the war, no one sees it as directly linked to the price increase. On the contrary, there is an opinion, often shared by Crimeans, that without the ‘special military operation’ it would have been worse, prices would have been higher, the war would have been bigger, and so on. On the other hand, people want to return to the conditional year of 2021, when Crimea was developing, it was quiet, calm, planes were flying, and the influx of deep-pocketed tourists compensated for the high prices,” said Raisa, a Sevastopol resident.

Serhiy from Yevpatoria told OstroV that the statement of the “speaker of the state council of Crimea” Konstantinov about quick negotiations, compromises and lifting of sanctions was discussed by local media, as well as by his friends and colleagues.

“This is the first such statement from our authorities that everything could be over soon. People like this, I can see it in the comments of those who recently talked about the war to a victorious end and that ‘we will reach Kyiv and Lviv’. Crimeans need peace, tourists and normal prices,” he said.