Russian Economy General News: #11

Russia is a sugar plantation posing as a country

Russia has become self sufficient in sugar production thanks to ruble devaluation and agricultural advances and development.
Sugar beets now supply Russia enough to even start to export sugar. The sugar beat yield has gone up six times
when the planted acreage has increased only one and half times.

Proof that Russia is a "banana republic"

Is it wrong for my first thought to be... why sugar... but production is production and having capabilities in all areas is important... it is useful to have things you can trade when money doesn't mean anything any more and food will be a high priority because we all need it...

It is interesting that in a very short period of time a first world country like russia can increase production efficiency that dramatically... I thought the Russians offered poor productivity per hour compared with western workers plus technology.

I am begining to think a low value currency is a good idea... it promotes domestic options automatically simply because foreign produce becomes more expensive.

Of course it works best in Russia where there are the skills and people to develop all the technologies and skills you need. A tiny country like New Zealand would have to import some things simply because we don't have the capacity to make everything we need to the quality level we would like or want.

Russian Forex reached ~ $550 Billion

https://www.bloomberg.com/quote/RUREFEG:IND

flamming_python wrote:......
Sugar prices have gone down because of the surplus and a couple of plants are in financial trouble. Exports are basically the only hope.

When this happens and you can't lock in exports then you cut the production until supply and demand balances out, same as with oil or anything else

Market economy 101, Ruskies should learn to play the game instead of whining

And exports aren't ''only hope'', you do realize that agriculture operates on annual cycles and that one suboptimal harvest can flip everything on it's head?

You better have more than less otherwise you risk going down the same toilet USSR disappeared into

PapaDragon wrote:

flamming_python wrote:......
Sugar prices have gone down because of the surplus and a couple of plants are in financial trouble. Exports are basically the only hope.

When this happens and you can't lock in exports then you cut the production until supply and demand balances out, same as with oil or anything else

Market economy 101, Ruskies should learn to play the game instead of whining

And exports aren't ''only hope'', you do realize that agriculture operates on annual cycles and that one suboptimal harvest can flip everything on it's head?

You better have more than less otherwise you risk going down the same toilet USSR disappeared into

Indeed. It's called market economics. They can easily reduce harvests without going bankrupt so exports are not the only choice.
There would be an issue of there were technical issues with reducing harvests since processing plants would not be able to operate
economically. That is definitely not the case.

When this happens and you can't lock in exports then you cut the production until supply and demand balances out, same as with oil or anything else

Market economy 101, Ruskies should learn to play the game instead of whining

That only works in a managed economy... a communist economy where needs are forecast and production quotas are set to meet those needs... production or needs change then the plan changes, but for the individual farmer he gets paid for what he produces... his costs don't go down when he produces less so he tries to produce as much as he can because he makes money from his produce.

Sugar does not expire so you could simply store a whole lot for times when production is not so good for whatever reason, but you need to have money in the system to absorb those costs now.

Supply and demand is correct, but it is much more brutal than you or the west likes to make out... there are too many coffee shops in the main street... the one making the least money or earning the least profit doesn't just take one for the team and close to help the other shops become more profitable.

Hell... the least profitable shop could be owned by big companies in the city who have share ownership and run it down so it works out a huge loss so they can claim benefits and exemptions on their taxes every year.... they don't want it to make money...

The problem with 101 courses is that they are very basic and just cover overall generalities and don't go in to the nitty gritty...

The problem is that people see Russian fail even when Russia is winning. A six fold sugar yield in the west would be a point of celebration and
chest thumping "look at how good we are". But in the case of Russia, some natural reduction in production associated with a price drop is
going to ruin the whole industry. Total nonsense. It is market economics. Do you really think that all the goods and services you shop
for are supplied at 1000%. That no private regulation happens? Even in the mythical market economy limit of many producers making nearly
zero profits, there would be a natural incentive to reduce supply to increase prices. Competition prevents these reductions from being
extortionate. But in the real world you have few producers making sizeable profits and either colluding or reaching the same conclusions
and exerting much more control over supply and prices. Think of the automobile industry. The prices you pay for cars do not reflect their
production costs.

Yeah, sugar beets are not cars but commodities so they have marginal prices that are always moving up and down depending on market trends.
That is nothing peculiar to Russia, it is the generic behaviour of commodities. And there is no freaking crisis in Russia in this part of agriculture.

A plus from the price fall for sugar is that Russian consumer price inflation rates go down. Here we see the value of having import substitution.
Instead of the monetarist claims that "inefficient" domestic production which can be had for lower prices offshore is a "bad idea", the total opposite
holds. Imports are prone to forex shenanigans that can increase domestic prices for imports making them expensive and not cheap. So even
the alleged "inefficient" domestic production can provide these goods for lower prices. This is why banana republics are so poor, they don't generate
local jobs and production in a diversified economy and instead depend on imports, thereby siphoning their wealth offshore (on top of any corrupt
offshoring via rackets by oligarchs). Monetarist drivel about domestic inefficiency is BS since it does not apply to any real world products.
Sugar beats are commodities and Brazilian sugar cane obviously is not the only option because supposedly Brazil has a comparative advantage
in sugar cane production. Russian can clearly grow sugar beets instead and dial up and down levels of comparative advantage. The same goes
for high tech products. Russia is advanced enough to produce such goods with world leading quality and features and for prices that are lower
than the supposedly cheaper crap produced in China and re-sold by fat cat western corporations for massive markups. Total monetarist
theoretical fail on all fronts.

flamming_python wrote:

kvs wrote:

Russia is a sugar plantation posing as a country

Russia has become self sufficient in sugar production thanks to ruble devaluation and agricultural advances and development.
Sugar beets now supply Russia enough to even start to export sugar.    The sugar beat yield has gone up six times
when the planted acreage has increased only one and half times.

Proof that Russia is a "banana republic"

Sugar prices have gone down because of the surplus and a couple of plants are in financial trouble. Exports are basically the only hope.

And? Equate to how many plants exist, how many of them profit and how many of them are going to reduce overall costs to keep production going and there isn't a problem. Problem stems from some of these companies spending more than necessary and thus rely on high prices and export. Which shouldn't be the case.

miketheterrible wrote:

And?  Equate to how many plants exist, how many of them profit and how many of them are going to reduce overall costs to keep production going and there isn't a problem.  Problem stems from some of these companies spending more than necessary and thus rely on high prices and export.  Which shouldn't be the case.

A six-fold increase in production indicates that the room to adjust processing is huge. We are not talking about a market of 10 people. The market
is 147 million people. Given the demand, there will not be any 100% collapse of production. This is precluded merely by domestic price drops.
The price drop will

1) induce an initial production contraction of at most a few percent (not 100%)

2) given (1) the price drop will stop and then prices will rebound.

3) so any price drop is actually self-limiting and cannot grow in an unbounded fashion.

Only if the domestic production is cut back too much will imports become competitive again and lead to a real contraction of Russian production
which can rightly be called a crisis. No market player would behave in a way that ensures such an idiotic outcome. People should stop
treating Russia as if Gosplan was still active. Even dumb profiteers generate market dynamics that never enters the scale of self-damage
that an incompetent central planning agency can achieve.

Isn´t it normal for a market economy that one or two weaker companies in some market segment go bust from time to time?

If one of the sugar companies goes bancrupt then the rest will take over the market share. Or two companies will merge to lower the costs.

Hole wrote:Isn´t it normal for a market economy that one or two weaker companies in some market segment go bust from time to time?

If one of the sugar companies goes bancrupt then the rest will take over the market share. Or two companies will merge to lower the costs.

That this has to be explained in the case of Russia says everything about the hysterical detachment from reality of many people
when it comes to Russia. Everything is doomed, everywhere there is crisis, Russia doesn't make anything and when it does
it is like it is in a depression....

Wake me up in a couple of years when Russia starts importing 90% of its sugar.

Babushkas should start baking more tort (cakes). Problem solved

Isn´t it normal for a market economy that one or two weaker companies in some market segment go bust from time to time?

If one of the sugar companies goes bancrupt then the rest will take over the market share. Or two companies will merge to lower the costs.

On paper... but in reality size and money and power mean more... if there are two companies selling rival products... say fizzy drinks... lets call the Pepsi and Coca Cola... in their home market there are likely dozens of competitors and you will get loyal customers for each brand which might change over time as new recipes come out...
When they move into a new market they have the money and the power to undersell all the current brands in that market... they can run at a loss for 10 years... no local company could make a loss for 10 years and remain in business so they go under and the big foreign company starts out by making them an offer... we will buy you out for less than you are worth but a reasonable price to start with... if you say no then we will undercut your prices and spend a fortune on advertising... we will also use bully tactics against you... we will provide the shops that sell our drinks with refrigerators but demand they get put in prominent places in the shop and you do not put competitors drinks in that machine either. As their market share grows they will tell small shops they can't sell any other drinks if they want to keep selling theirs...

Eventually the local drink maker can't take it any more and sells up... the big company buys their product and rights to it and all the bottling factories and distribution systems and then sell their competitors products in the same market and increase the price for all the drinks to improve profits.

Have a look at the Coca cola range... go to Burger King and look at the drinks options... Coke, Fanta, Sprite, Seven Up, (here in New Zealand we have another lemon flavoured fizzy drink called L&P or Lemon and Paeroa) these are products they have absorbed as they grew... there was nothing free market about it... and for countries entering the WTO there is nothing free market about it... rich getting richer

The USSR actually pioneered the first frost-resistant sugar beet strain, there's a long history in Russia of producing sugar from sugar beets, over 200 years, and it's by far the largest cultivator of the vegetable today.

Thanks for that... learn something new every day... BTW careful... when the BBC gets wind of that I can see the headline... Russian Chernobyl sugar beet GM modified to survive cold... eat Russian food and risk genetic mutation or some such shit...

More evidence surfaces ,that the polite incompetent President is the one to blame for
the lack of diversification of Russia economy and for Russia lagging behind the west
by 10 years at least...in computing..

17 DECEMBER 2019

Russia has launched an effort to build a working quantum computer, in a bid to catch up to other countries in the race for practical quantum technologies.

Russia is far from this milestone. “We’re 10 years behind,” says Fedorov. “But there’s a lot of potential here, and we follow very closely what’s happening abroad.” Poor funding (from Putin ) has excluded Russian quantum scientists from competing with Google, says Ilya Besedin, an engineer at the National University of Science and Technology in Moscow.  

Russia joins race to make quantum dreams a reality

https://www.nature.com/articles/d41586-019-03855-z

So there you have it.. a Russian scientist saying that the lack of funding from Russian government..
(from Putin the great moron)  have turned Russia in an outdated nation vs the west
in advance civilian high tech business..far behind america , and europe ,japan and china..

And the worse part of all is not the massive under funding of Putin's on Russia high tech civilian
business industry ,but the fact that scientist get tired of doing nothing and move  to another
country that -DO CARES -about leading in science and technology .                                                                                    

but finally after the pressure of the  scientific community managed to convince
the moron in chief Putin ,to stop his mediocre vision for Russia development ,from a banana
third world  commodities like nation ,focused economy and seriously for the first time invest
in Russia scientific research for quantum computing..  i say this is thank to Russia being banned
from sports olympics... made putin realize a little.. of the opportunities he miss..by allowing
the west google, ibm and others to LEAD in world cumputing ,while putin brags about his wheat farms
production breaking records in the world..     as if any body cares..


This is why all major american silicon valley companies , Google ,Microsoft, IBM and wallstreet banking
industry are pouring a lot of money in quantum computer in US ,because they clearly understand ,the
enormous gigantic potential that leading in quantum computer.. that building a computer that works for
business and society benefit.. will dramatically change the development of the planet..and will take by storm
the entire technology industry market... as much as semiconductors binary computing did.. and the huge potential for business , when there is no competition , this is not mention the nation prestige and influence
that leading in high tech will have for the continuation and expansion of the American empire.. since is not secret
US use their high tech business as a weapon , and countries who wants to be developed , will have to follow
the west policies and their system if want to be part of their leading development... that US economy have systematically enjoyed for so long , in parts thanks for the lack of interest and vision of most other major nations who focus only to do business in the easy things ,that every other nation can do.. like commodities based economies as Russia and Africa are,who are the most basic form of economy of all..thay live from what mother nature produce and sell it.

Ahh boo hoo... now that they have hypersonic anti ship missile entering service they can look at more exotic stuff... much of which they are already ahead on like new radar types and systems.

Can't fund everything and now that work has started they can look at more options to develop based on current and potential results and can make more informed decisions about which directions to go.

posting for statistics

Russia in 2020: Will the Economy Grow Faster?

https://www.themoscowtimes.com/2019/12/25/russia-in-2020-economy-grow-faster-a68624

Austin wrote:posting for statistics

Russia in 2020: Will the Economy Grow Faster?

https://www.themoscowtimes.com/2019/12/25/russia-in-2020-economy-grow-faster-a68624

The Moscow times, is garbage. You haven't learned a fucking thing that is for sure.

https://russia-insider.com/en/russia-builds-nuclear-icebreakers-size-wwii-battleships-750m-lockheed-needs-500m-ships-8x-smaller

As with the Project 636.3 diesel-electric submarines, Russian prices to build large expensive hardware are vastly smaller than
western prices. In this case the PPP correction factor is 8 * 500/750 = 5.333 instead of the 6 as for the 636.3 submarines,
but is similar.

Do not rely on the official PPP since it is fixated on consumer prices. The cost of some pop-drink is not as important for the size
of the GDP as is the cost of large ticket items such as nuclear ice-breakers. Anyone who thinks that Russia's economic potential
is 1/20 that of the USA is ignorant or an idiot. A much more realistic estimate is between 1/3 and 1/2 mostly dictated by the
the size of the population. More than 1/3 of the US GDP is due to its offshore empire. That does not contribute directly to
the wealth of its population. It also is in the form of consumer crap like Coca-Cola and not hard core tech.

miketheterrible wrote:

Austin wrote:posting for statistics

Russia in 2020: Will the Economy Grow Faster?

https://www.themoscowtimes.com/2019/12/25/russia-in-2020-economy-grow-faster-a68624

The Moscow times, is garbage. You haven't learned a fucking thing that is for sure.

There is no doubt that the Moscow Times is an anti-Russian propaganda rag with the explicit purpose of fostering regime
change via generation of discontent. So anything pertaining to the economy and Russian society in general that it
publishes is not objective and mostly based on lies.

I love to hear news in western biased media saying the Russian economy is in trouble... because they project so much you know it is suggesting they are worried about western economies...

When they say Putin is evil and corrupting... what they are saying is that we have trump and merkel and johnson why do we end up with such idiots, while Russia gets a cool Bond villain boss...