A drought in Russia has led to a 20-25 percent hike in bread prices in Armenia. Economists predict even steeper increases in all wheat-based products, as Russian farmers – who produce nearly 80 percent of Armenia’s wheat supply – suffer their worst drought in 120 years.

Consumer rights activists, however, say that the current increase is unfounded, charging that the stocks of current flour are sufficient to supply demand and that prices should not be affected yet. In fact, prices have not yet been affected in Russia, though officials expect up to a 30 percent increase after the autumn harvest.

Bread prices at some stores in Yerevan and provinces of Armenia rose by 10-20 drams (about 3-6 cents), and the cost of a 50-kilogram sack rose by more than $5.

Marat Sedrakyan, who has his own bakery, says that he and other bakers must raise prices because wholesale prices have risen.

“A day ago, I bought one sack of flour at 10,200 drams ($27), whereas, a week ago, it was only 8,000 ($21) for the same 50kg-sack,” Sedrakyan told ArmeniaNow.

Economist Bagrat Asatryan, former Chairman of Central Bank of Armenia, blames Armenia’s monopolistic economy, rather than Russia’s weather.

“There is only one logic here: if prices rise in the international market, they rise in Armenia, too, if the international prices fall, they, nevertheless, rise in Armenia again,” Asatryan told ArmeniaNow.

According to Asatryan, in 2008-2009, wheat prices fell by about 50 percent in the international market, however no such a price decline was registered in Armenia.

“…because import and the whole economy are monopolized, and centralized in the hands of a few people,” the economist explains.

Almost 60 percent of Armenia’s domestic wheat demand is imported by just two companies – ‘Manana Gray’ and ‘Alex-Grig’ (belonging to NA deputy Samvel Alexanyan); and economists allege that Alex-Group which has seized the bread market is simply getting super profits.

This year, because of unfavorable weather conditions in Armenia, vegetable and fruit prices rose, too, by 17-21 percent.