Rates of Market Decline are Expected to Slow Down

The flour market in Russia is shrinking. The last fact of market consolidation by 2.3% was recorded in 2006. Since 2007 sales of flour have been on an annual decrease. In 2010 the volume of flour sales will total 9.6 million tons, which is 2.1% less than in the previous year. In the foreseeable future the rates of market decline are expected to slow down. According to BusinesStat, flour sales will have fallen to 9.3 million tons by 2014.

Reduction of the size of population and increase in the household income are major reasons of the flour market decline. Due to these factors, not only consumption of baked goods is on the fall, but retail purchase of flour for home baking decreases as well.

The flour market has been lately changing: manufacturers of flour and baked goods are reducing the volume of flour consumption, while producers of macaroni products and flour confectionery are increasing the purchasing. Besides, there is a growing demand for flour on the side of food processing industry – manufacturers of pelmeni, pizza and pancakes.