Russian Food Suppliers Have Begun Halting Shipments

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Russian Food Suppliers Have Begun Halting Shipments (ZeroHedge, Dec 17, 2014):

Until now, when it comes to the fallout in the Russian economy from the crude price plunge leading to a collapse in the Russian currency, most of the interest has been on how the Russian financial system recovers and/or survives and just as importantly, what Putin’s response would be. Just yesterday, we wrote that as a result of capital controls fears, many western banks led by Goldman Sachs had halted liquidity to Russian clients and other local entities.

However while the adverse impact on the Russian banking system has been mostly confined to the upper class – since there is virtually no middle class in the country to speak of – the second cold war of words, which rapidly morphed into a very hot financial war, is about to hit the very ordinary Russian on the street, because as Russia’s Vedomosti reports, citing vegetable producer Belaya Dacha, juice maker Sady Pridoniya and others, Russian suppliers are suspending food shipments to stores because of unpredictable FX movements. And it is about to get worse: very soon Russians may have to live without imported alcohol because at least on supplier of offshore booze, Simple, halted shipments in “a two-day pauseā€ to see what happens with the ruble, Vedomosti reports.

The full story from Vedomosti:

Food retailers are faced with a halt in the supply of deliveries, according to both suppliers and retailers. The main reason – the jumps in the currency jumps and the devaluation of the ruble, which makes it impossible to plan activities in the current environment.

The largest domestic producer of juices “Gardens of the Don” has suspended shipment of products at the old prices to a number of trading companies due to the sharp depreciation of the ruble, the company said. The reason is that the cost of its products is more than 70% denominated in foreign currencies.

Gardens of the Don will ship products “first of all to all network companies who understand the situation and accept the new prices.” From 16 to 21 December 2014 the company has suspended shipping to merchants who did not give a definitive answer on the adoption of higher prices, explained the producer of such juices as “Gardens of the Don” “Golden Russia” “My” “Juicy world” and others.

Shipments were also stopped by a major distributor and importer of alcohol, Simple, told “Vedomosti” an employee of a major retailer. He was informed yesterday that the Simple warehouse would be closed. A company representative confirmed the suspension: the company took “a two-day pause.”

“We, as a company that depends on the value of currencies, can do nothing in this situation. We are putting prices in rubles, prices in Uslovniye Yedintsy (UY) or ‘conditional units’ are not acceptable under the current laws – reported a representative Simple CEO Maxim Kashirin. “Buying the currency now or taking out a bank loan, is impossible: banks will not finance receivables “.

According to him, restaurants and retailers will pay with a long delay, the federal network – up to several months.

Kashirin says that Simple hopes to resume the next day delivery, but “The decision will largely depend on what will happen on the foreign exchange market.” “If everything will fluctuate with the speed with which fluctuates now, we will not be able to give a long delay, great discounts. Most likely, we will be forced to sell, let’s say, on a prepaid basis” he fears.

Large fish suppliers that operate on imported raw materials, have also begun to suspend deliveries. December 16 during the “Orgy” period in the foreign exchange market, the company suspended shipments to counterparties for one day, told “Vedomosti” employee of a large fishing company. According to him, the company now operates in normal mode, the issue of increasing prices is discussed. However, due to the sharp depreciation of the ruble with all counterparties company now works exclusively on a prepaid basis: “There are no delays.

And so on.

Which is why tomorrow’s annual address by Putin to the nation will be, as has been dubbed, his “moment of truth” because while patriotic fervor is still high and the population is willing to suffer runaway inflation for a short period of time, even the greatly suffered Russian population will meet its breaking point. The question is when, and whether that will take place before or after the US shale industry reaches its own breaking point, at which point Saudi Arabia will finally release the price of oil which it has, according to all the “supply-siders”, been holding back. Alas, as we and others have demonstrated, that breaking point will most certainly not come for many more months to come. Which means that Putin better find an alternative soon, because if and when the food (and vodka) of Russians’ is impaired, then things have a tendency to get very bad.

 

1 thought on “Russian Food Suppliers Have Begun Halting Shipments

  1. I find it difficult to believe the man who engineered an entire world economy around the US dollar, who led over 70% of the world economies to his economic system is going to fall down now. The entire idea of a world reserve currency is now obsolete, and regardless of how vicious the US gets, the US is no longer the financial giant they once were. This economy, built by Putin, China, India, Brazil and South Africa has all growing and emerging economies within it. Even Switzerland and Qatar joined. It is interesting to note the one country holding their own with the oil nonsense is Qatar….the one hurting the most is the US.

    New York just passed a bill to stop Fracking, and they will be followed in short order by most states. There is a huge shift going on in the world economy, and if the US thinks it is going to re-arrange itself with them at the center……they are truly delusional. The shift is to an electronic economic system like the Sucre, and there will be no world reserve currency. This truly screws the US and the FED.
    For the first time in a century, the FED no longer has say over the world economy. Interest rates are going up, and the FED can no longer control them. That is really going to hurt lots of US greedy guts, and as angry as they get, it will change nothing. If Putin vanished tomorrow, the changes have already been set, and the US is the Sick Man of the Americas, nothing more.

    If anyone needs to know what that means, Google Sick Man of Europe……..and you will get a short lesson about the fall of Spain.

    Right now, US tanks are rolling towards Russia. Obama has promised the US puppet government in the Ukraine that “lethal support” will be there this week for their use. If they start firing on Ukraine people, the people will throw the puppet government out, and probably kill the fools in charge. It is a pity US leaders are so ignorant, Russians (including Ukrainians) are the toughest in the world, and they will not put up with it. And, Putin won’t let them get away with it, either, and Russia has China on their side. China has been building a huge military since 2010……so much happened that year…….

    If the US is fool enough to hit Russia, the world will join Russia. Germany and the UK have both told the US to stay out of Russia. Germany, France and the UK are only three nations who are finding alternative ways of trade avoiding the dollar. If the US hits Russia, everyone will have to show their position. The less than 30% remaining nations with the dollar will have to choose….and it won’t be the US.

    There is so much to cover here, I cannot say it all in a few sentences. But, I think this oil and currency chaos is one of the last cries of the west, and it will not last long. I could be wrong, but lets look at the money. Follow the money, it will tell you the truth.

    The US is bankrupt.
    Russia has been stockpiling gold for the last five years.
    What happens if Putin puts gold behind his Ruble tomorrow? Perhaps a new version of the Ruble? What would that do to the greedy guts shorting Russia?
    Putin, and Russia is making money regardless of this current chaos. As a result, they have choices.
    Does Putin have enough gold to put behind his money? How about silver? Surely he has enough silver, what is its worth compared to gold?
    Don’t be surprised if he does something like this.
    I think he knows exactly what to do, and US leaders are clueless.
    So, don’t short him yet.

    Goldman Sachs isn’t all banks, and so far, they are the ones declining the Ruble.
    Don’t sell the chess player out yet.
    Stanley, what do you think?

    Does the US really believe the genie can be put back into the bottle?
    Do they really think they are a world power compared to China and Russia? They are allies, China won’t support anything the US does, nor will Iran, OPEC, any nation in Africa, South or Central America…..Japan and India joined BRICS. Except for Japan, which is sinking like a stone, most of these nations are making money. The US has not cut a profit in years. Now, it is too late.

    I wish I understood currency wars better, but I think Putin does.

    Over 70% of the world economies are now free of the US dollar, US financial domination and Russia has most of the world in his corner.

    If one reads a bit more carefully, the statement banks are not accepting Rubles lead by Goldman Sachs…….the real statement said Goldman is not accepting Rubles, B of A and Citibank continue to do so…..along with most international banks. Goldman is not the entire economy.

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