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Inflation and Russian Export Taxes + Orange Cake with Sunflower Oil

It's hard to turn into the news and not read about food price inflation. The question now is what, if anything, should be done about it.

Different countries have different ideas. For example, here in the U.S. the latest reports are that Biden wants to break up meat producers to lower prices. The administration is also looking into price fixing, like has been found in the chicken industry previously.

For today, instead, we are going to discuss what Russia is doing and how it might have negative ramifications ... for Russian producers.

But first. Why are food prices rising?

On one side of the story, supply has decreased on many food products. A few reasons relate to the pandemic:

(a) some factories had to temporarily shut down or reduce the number of employees because of the pandemic,

(b) in some cases foreign workers were restricted from entering countries during harvesting periods because of country lockdowns,

(c) changes in demand during the initial period of the pandemic affected planting decisions for the next year.

There are other factors at play as well, such as weather (droughts or fires) and slowed shipping.

Meanwhile, on the other side, high demand from countries like China have further increased prices.

Vegetable oil: we use it all the time for cooking, whether it is for frying, sautéing, roasting, or baking. There are many kinds. The crisco bottle of vegetable oil I normally grab at the grocery is made from soybeans. Meanwhile, canola oil is made from canola seeds (which are similar but not the same as rapseeds). Coming in with a stronger flavor is olive oil. And lesser known for cooking (at least in the US) is palm oil which used in food products, beauty products, and biofuels. In Asia and Africa, palm oil is also used as a cooking oil. There is also sunflower oil, that - you guessed it - is from sunflower seeds.

Vegetable oil prices have been rising for some of the reasons I mentioned above. Vegetable oil is widely used so higher prices will increase people’s grocery bills both directly in purchases of oils but also indirectly where oil is used to produce the item.

Russia is a net exporter of sunflower oil, which means they produce and sell more sunflower oil than is consumed in the country. If the price for sunflower oil outside of Russia is rising along with vegetable oil prices increasing, then it should increase the domestic price as well. Think about it. If you are in Russian and can sell sunflower oil to someone in Greece for $10, why would you sell it to someone in Russia for less than $10 (minus the cost of transporting)? So with high prices outside the country, it increases the prices inside as well.

As I investigated increases in vegetable oil prices, I found something interesting - Russia (the largest producer of sunflower oil) is putting an export tax on the oil. In other words, for someone to buy Russian sunflower oil from another country, it will cost more money. This higher price should decrease the amount purchased by foreigners (law of demand).

How does this export tax help Russia?

If there is less sunflower oil demanded externally (by adding a tariff and increasing the price) it should decrease the price domestically with more sunflower oil available for locals.

This seems like a great way to help out consumers in Russia and keep prices lower!

Are there any risks?

Well there are two sides we usually talk about: the producers and the consumers. Consumers in Russia might like lower prices, but will producers?

Rather than being able to sell their sunflower oil at higher prices outside the country, producers now face lower prices. With lower prices it lowers their profits, decreases their incentive to invest in R&D, and reduces production of sunflower oil for the future. Lower production in the future results in lower profit, lower GDP, and potentially fewer workers hired.

Ok, so it's just sunflower oil. It will help consumers and hurt producers -- of sunflower oil. But, here's the trick, they haven't just implemented an export tax on sunflower oil -- it's also on metal and wheat.

With these export taxes, domestic prices are kept lower (although debatable how much this will help consumers overall) but the Russian economy might be hurt in the future.

Who else is hurt? Foreign consumers! The export tax meant to keep prices low in Russia has helped fuel inflation in the rest of the world! It's like a never ending (but hopefully ending at some point) cycle.

So, as a recap, food prices are rising. Some governments want to do something to help, but it is tricky to know what to do. Russia has decided to implement export tariffs to keep some prices from rising too much. These export tariffs may actually hurt their own producers now and in the future with lower prices.

It's a strange time...

Greek Orange Cake (Portokalopita)

I learned how to make this delicious orange cake when I was in Greece about a year ago. You can say that I imported the recipe. This is going to be a weird thing to reveal as a food blogger, but I’m not a huge cake fan. I do enjoy making them, but in terms of eating them I can usually take it or leave it. This cake, however, is an exception. It is different than any cake I’ve made or eaten before. I have tweaked the recipe just slightly to make it my own (American-ized it), but I give full credit to the Greek Kitchen in Athens for this delicious dessert. Next time you’re in Athens, I definitely recommend one of their cooking classes! It looks like they are even doing online classes now!


1 package Phyllo Sheets (it's about 450-500 grams) 4 Large Eggs 1 cup (200g) Sugar Zest of 2 Oranges

1 cup (300g) Greek Yoghurt

2 tsp. Vanilla

1 tsp. Baking Powder

1 cup (200ml) Sunflower Oil

1 cup (200g) Sugar 1 1/2 cup Room Temperature Water

Juice of 2 Oranges 1 Cinnamon Stick

Preheat oven to 350 degrees.

Grease a round 9 inch cake pan.

In a bowl, combine eggs and sugar and whip up. Add orange zest, yogurt, vanilla, and baking soda. While whisking, add the sunflower oil.

Once combined, here is the weird part. Tear up phyllo dough into the batter. Yup... just tear it into pieces and drop it in.

Bake for 45 min. to 1 hour until golden brown in color.

Let cake cool. They say to let it cool completely, but I've never done that...

Make syrup. Heat up water, sugar, orange juice, and cinnamon stick in a sauce pan. Bring to a boil for about 2 minutes.

Poke holes in the cake. Pour the syrup (while still hot) over the cake.

I'm told this cake is best the next day. I've never waited that long.

I made a little video to show you how to make it...


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