Price Trends in the New Year Food Market: Increases and Expectations

Every year, various food and holiday fairs are organized in Azerbaijan ahead of the New Year. The primary purpose of these fairs is to offer quality products at affordable prices.

Rising Prices Year by Year

Economist Vahid Maharramov notes a significant increase in food prices compared to the previous year. Price hikes have persisted throughout the year, becoming more pronounced toward its end.

"The price of meat has risen by 10% compared to last year. For instance, lamb has increased from 20 AZN to 22-23 AZN, mutton from 18 AZN to 20 AZN, and beef from 14-15 AZN to 16-16.5 AZN. Similar increases are observed in products like walnuts and hazelnuts. Recently, the prices of tomatoes and cucumbers have also gone up. Eggs have risen from last year's 30-35 qepiks to 40-45 qepiks."

According to Maharramov, due to previous years' trends, further price increases are expected as winter approaches. He adds that there is a noticeable quality gap between products sold at markets and those at fairs. Often, lower-quality products that fail to sell in markets are sent to fairs.

Fairs in Baku and Sumgayit predominantly attract market traders, with only a few producers from villages and regions participating. Among these producers, some are local municipality representatives tasked with bringing certain products from regional markets for sale at these fairs. Lower prices at fairs usually reflect the lower quality of the products, which can sometimes be found even cheaper in markets.

Fairs Falling Short of Expectations

Maharramov explains that fairs are promoted as offering low prices through advertisements, leading people to visit them in hope of bargains. However, buyers at city fairs often complain about high prices and low quality.

"I recently visited a fair at the Third Microdistrict. While high-quality pomegranates were priced at 4 AZN in the market, the same pomegranates were being sold for 7 AZN at the fair. The fairs give the impression of caring for consumers, but in reality, consumers are being misled."

The economist advises consumers to opt for markets, where they can negotiate better prices for quality products. Despite over a decade of such fairs being organized, little has changed. The meat of older animals is sold cheaply at fairs, and while village eggs are priced at 45 qepiks, they can be purchased for 40 qepiks at fairs.

Practices Unseen in Azerbaijan

Maharramov argues that, considering higher consumer demand before holidays, prices should ideally decrease. In other countries like Turkey, most post-Soviet states, and even Russia, prices drop ahead of holidays to boost turnover. In Azerbaijan, however, the lack of diverse job opportunities has made trade the primary occupation, leading to higher prices during holiday seasons.

"We see markets and supermarkets at every step, and now the number of fairs has also increased. The abundance of traders creates the perception that selling products at higher prices will yield greater profits. As a result, prices are artificially inflated during holiday seasons."

Impact of a Lack of Alternatives on Price Hikes

Maharramov highlights that Azerbaijan has only one wholesale market, Meyveli. This monopoly allows Meyveli to dictate prices, especially during holiday seasons, as there is no competing market. Traders, suppliers, and entrepreneurs who procure products from Meyveli cannot sell them cheaply if they buy them at high prices. Thus, the monopoly of Meyveli ensures no alternative source for affordable goods.

Maharramov stresses that farmers are not allowed to bring their products directly to market. The fairs are merely a façade, perpetuating artificial price increases year after year. Unfortunately, prices for essential holiday food items continue to rise artificially, a recurring trend.

Monopolies Sustaining the Issue

The government has been advised to establish multiple wholesale markets to foster competition. Such competition would stabilize prices and prevent artificial hikes. The presence of multiple markets would also increase the availability of affordable, high-quality products, offering consumers greater choices.

"Products like meat, imported butter, fruits, walnuts, hazelnuts, and eggs have seen significant price increases. Currently, prices for these essential holiday items remain high and are expected to continue rising in the coming days."

Maharramov emphasizes that the government must create a competitive environment and broaden suppliers' choices to curb price increases. He suggests adopting practices seen in other countries, where prices are reduced before holidays to boost turnover. However, the current situation in Azerbaijan continues to follow the rules dictated by monopolies.