October 25, 2007 (LPAC)--The Russian government yesterday signed an agreement with major food producers and retailers, hoping to stem the surge of price inflation in recent weeks. The agreement covers prices on bread, cheese, milk, eggs and vegetable oil until early next year. Large retail companies will limit price increases on these products to 10%. In addition, the Ministry of Economics is considering a 10% hike in export duties on wheat, in order to hold prices lower inside Russia.

Russian media are discussing the moves as "part of the election campaign," referring to the State Duma elections in December. Sources in Russia and Belarus say that food price inflation is foremost on the minds of most people. In Russia, the Financial Times reported today, one-month price rises for September included a 13.5% jump for vegetable oil, 9.4% for butter, and 7.2% for milk. Several citizens asked President Putin about restraining food prices, during his Oct. 18 webcast. Putin cited the international biofuels boom, among other causes.

Deputy Prime Minister and Finance Minister Alexei Kudrin yesterday warned against any "price freeze," saying, "This is the market, and prices in the market do not get frozen." Nonetheless, he, too, said that prices must be at least "stabilized," according to a report on Ekho Moskvy radio.