Food Maidan: Shortages and Panic Buying in Lvov

2/25/2015

Food Maidan: Lvovians are fighting over oil and flour.

Translated from Russian by J.Hawk

The Lvovians who were jumping so crazily on the Maidan are now displaying a similar level energy when jumping from store to store in search of food. They are not even looking at labels, but are rather grabbing anything they can find, including goods marked with the Russian flag. The inhabitants of Ternopol are liable to kill each other over a bottle of sunflower seed oil, whose price has grown with every day.

There is a genuine food hysteria in Galicia which is due to the import tax which was introduced by the Cabinet of Ministers led by their beloved Prime Minister Yatsenyuk, and to the catastrophic fall of the hryvnya. The devaluation is causing Lvovians to clear the shelves while refraining from mentioning Bandera, yelling “Glory to Ukraine,” or even singing the national anthem.

“People are buying up flour and sugar by the sackload, we have a shortage of groats, sunflower seed oil, and frozen goods. Groats sell the best, because they are sold by weight and are cheaper than the packaged kind,” write the local media. Other popular items are salt, matches, candles, and napkins. The people in half-emptied supermarkets are asked not to panic since new goods have already been ordered.

“To be sure, many of these goods are no longer to be found even in warehouses, and due to the new prices the suppliers are unwilling to purchase more. There may be a shortage of coffee, tea, household chemicals,” an administrator of one of Lvov’s supermarkets admits. Nobody explains how a city famous for its coffee is going to bet by, but considering the prices on imports Lvov may soon drop that aspect of its image.

Local media also write that there was a terrible fight in Ternopol over sunflower seed oil that was on sale for 15 hryvnya per liter. Two women were hospitalized.

J.Hawk’s Comment: The National Bank of Ukraine is taking drastic measures to keep the hryvnya from devaluing even further. Just yesterday it prohibited Ukrainian banks from buying foreign currency until February 27, in an effort to depress the demand which ideally ought to help stabilize the hryvnya. On the debit side, this is only a temporary measure which hits importers who need foreign currency to operate, and moreover moves legitimate currency trades into the black market. The NBU’s determination to keep the exchange rate somewhere closer to 25 hryvnya/dollar may yield a few days of stability (though that’s not a foregone conclusion—today the exchange rate has fluctuated wildly), only to result in a much worse crisis once the ban is lifted on the 27^th. 

Just to make things worse, Gazprom has announced it will end gas supplies to Ukraine due to its failure to pre-pay for future deliveries, a move apparently related to the earlier decision to supply gas directly to Novorossia (after Kiev cut off its supplies) and to bill Kiev for the full volume.

Either way, Ukraine’s economy is in an extremely serious crisis. Typically, about the only thing the West can do is talk about sending arms and trainers to Ukraine, which actually exacerbates the country’s economic instability by raising the risk of conflict escalating.

11:27 AM