r/CollapseOfRussia

A huge wholesale market for expired food products is gaining momentum in Russia, despite the law prohibiting the sale of expired goods for any purpose.

Izvestia has discovered that advertisements for the sale of "rotten" goods, including cheese, meat, and canned goods, sometimes in quantities of tens of thousands of units, are published on specialized online channels and find buyers who can then sell the expired goods to their customers.

Expired frozen chicken, for example, is being offered for sale at 75 rubles per kilogram—a third of the normal price. Twenty tons of cheese (unnamed and Brie), 65 tons of expired chicken and beef sausages, 12,000 cans of stewed meat, 7,000 servings of "plov with chicken" with expired dates, and 68,000 cans of expired Coca-Cola imported from Jordan are on sale at discounted prices.

Izvestia's sources in the food retail market confirm that selling expired goods is becoming the norm. "When a store or small producer accumulates tons of expired meat, poultry, or fish, they don't take them to the landfill—it's expensive and attracts attention," explains one of the publication's sources. According to him, the expired goods are sent to the culinary department or transferred to "their" semi-finished product manufacturer, which then masks the problems with seasonings and flavor enhancers.

The director of a dairy warehouse in the Moscow region claims that small businesses "love to buy expired goods." "Expired mayonnaise was sold to shawarma shops, and expired cottage cheese was taken to bakeries," says a warehouse worker. Ultimately, the seller achieves two goals simultaneously: getting rid of dangerous goods and receiving a profit, rather than a fine.

The growing demand for expired food is a symptom of the severe decline in incomes and the impoverishment of the Russian population, notes economist Igor Lipsits.

Survival is becoming "more and more difficult," and people are "willing to do anything," he reasons. "The very fact that such trade is developing is a beautiful refutation of the president's fine words about real wages rising in Russia. In reality, Russia is getting richer, and their lives are getting better and better." "They're running out of grief and buying groceries online that are almost expired, with the risk of food poisoning, but at least they're so cheap that you can at least buy something," Lipsits notes.

source: The Moscow Times https://archive.is/k9TON

All major refineries in central Russia have been forced to completely halt or significantly reduce crude processing and petroleum product production as a result of drone attacks over the past two weeks, Reuters calculated based on official data and source information.

The number of drone attacks on Russia's energy infrastructure has increased in 2026, and the number of refineries targeted has doubled since the beginning of the year. In the second half of May, refineries in central Russia, which supply the domestic market with fuel and account for a significant share of petroleum product exports, nearly ground to a halt.

Among the major refineries in the central part of the country that have been attacked are those in Kirishi, Moscow, Nizhny Novgorod, Ryazan, and Yaroslavl.

Thus, the Ryazan Oil Refinery has been completely shut down since May 15, and the Moscow Oil Refinery since May 17. According to fuel market sources, the Yaroslavnefteorgsintez Oil Refinery (YANOS) has been operating at about a quarter of its nominal capacity since last week.

One of the country's largest oil refineries, Kirishinefteorgsintez (Kinef, with a capacity of 20 million tons of oil per year), has been completely shut down since May 5. Another large refinery, Nizhegorodnefteorgsintez (NORSI, with a capacity of 17 million tons per year), was attacked on May 20. It has not yet been determined whether NORSI has managed to partially maintain its operations.

The total capacity of the fully or partially shut-down refineries exceeds 83 million tons per year (238,000 tons per day) – about a quarter of Russia's total. Together, they produced over 30% of all gasoline in Russia and about 25% of diesel fuel, according to Reuters calculations.

For example, the Ryazan Oil Refinery supplies a significant portion of its fuel to the Moscow and Moscow region markets. Sales of gasoline and diesel fuel from the Ryazan Oil Refinery on the St. Petersburg International Mercantile Exchange (SPIMEX) have been suspended since last Friday, according to the exchange.

YANOS also almost completely suspended gasoline sales on the SPIMEX on May 8, while diesel fuel sales have decreased by 2.5 times.

Several other Russian refineries, which could have compensated for the lost petroleum product production at damaged plants in the central part of the country, have themselves been attacked and are also shut down or operating at below full capacity, Reuters notes.

In particular, the Permnefteorgsintez Refinery (13 million tons per year) and the Astrakhan Gas Processing Plant (3 million tons of gas condensate) are currently idle. The Novokuibyshevsk Refinery (8 million tons per year) is operating at approximately a quarter of its capacity.

source: The Moscow Times https://archive.is/DLyKy

Gazprom shares fell sharply on the Moscow Exchange on Wednesday following President Vladimir Putin's visit to China, which again failed to reach an agreement on the construction of the Power of Siberia 2 gas pipeline.

At 6:32 PM Moscow time, Gazprom shares fell 3.5% to 119.06 rubles per share, becoming the worst-performing blue-chip stock on the Russian market. The gas holding company lost approximately 100 billion rubles in market capitalization in one day, or more than 120 billion rubles, or $1.75 billion, compared to levels at the start of Putin's trip to Beijing.

"Investors were expecting concrete details on Power of Siberia 2, but were once again met with uncertainty," SberInvestments analysts wrote. Along with Gazprom, TMK shares also fell 6%. "The company was ready to supply large-diameter pipes for Power of Siberia 2, and investors considered it a potential beneficiary of the project. But there's been no decision on the gas pipeline, meaning there's no major order," Sberbank notes.

The entire market came under pressure, notes Freedom Finance Global analyst Vladimir Chernov. The Moscow Exchange Index, which includes four dozen of Russia's largest companies, ended the day down 1%, at 2637.3 points. Rosneft shares fell 2%, Gazprom Neft 1.5%, and Novatek 1.3%.

The market is under pressure from the "lack of concrete results from negotiations between Russia and China," notes Chernov.

Although Putin brought five deputy prime ministers and ministers with him, spoke of the "unlimited" prospects for cooperation with China, and signed a "declaration on building a multipolar world" with Xi Jinping, the president failed to bring home any major new contracts from Beijing. Of the 40 documents signed following the visit, not a single one concerns oil and gas cooperation. There's not a single mention of the Power of Siberia 2 pipeline, which the Kremlin has been negotiating for over a decade.

There are still some unresolved "nuances" regarding Gazprom's new gas pipeline project, stated presidential press secretary Dmitry Peskov. He added that there is no agreement on the start date for construction of the pipeline, which Gazprom desperately needs after losing the European market.

The price of gas remains a stumbling block for the new gas pipeline, which Gazprom desperately needs after losing the European market, a source familiar with the situation previously told the Financial Times. According to this source, China is demanding a price reduction to a level close to the domestic Russian market. This is about $50 per thousand cubic meters, which is 5 times lower than what Beijing pays now ($258 per thousand cubic meters), and 8.5 times lower than Gazprom’s prices for other clients abroad ($420).

source: The Moscow Times https://archive.is/xD4t1

More than half of Russian companies faced cash flow shortages in 2026. Fifty-three percent of organizations reported a shortage of funds for operating expenses, with 27% experiencing the problem for the first time. This follows from a survey conducted by Action Finance, published by Vedomosti. The study included 527 respondents from various industries, from trade and agribusiness to IT and heavy industry. Most companies (58%) have an average annual turnover of up to 1 billion rubles, 32% between 1 billion and 15 billion rubles, and 10% between 15 billion and 1 trillion rubles.

Companies in the oil and gas and other raw materials sectors, wholesale and retail trade, and heavy industry were most likely to experience working capital shortages. In the first four months of 2026, 43% of survey participants saw their revenue decline compared to the same period last year. For 16% of respondents, it fell by more than 20%, and for 13%, it fell between 10% and 20%. Almost a third of respondents maintained their figures at approximately the 2025 level, while 26% of companies reported revenue growth.

To cover working capital shortages, 34% of respondents applied to banks for short-term loans. Of these, 19% were approved, 10% are awaiting a response, and 5% were denied. A significant proportion of companies sought funding from alternative sources: 24% noted that the owner had to invest personal funds, 11% turned to private investors, and another 3% turned to microfinance organizations.

The widening cash gap is due to rising costs and a simultaneous decline in demand, says Alexander Kalinin, President of Opora Rossii. Companies have faced an increased tax burden and an increase in non-payments from counterparties. In particular, state-owned companies have been late with contract payments since last year. By the end of 2025, this has become the main constraint on operations for 42% of organizations, according to a survey by the Russian Union of Industrialists and Entrepreneurs (RSPP).

Businesses are also increasingly being denied revolving credit, says Elena Dybova, Vice President of the Chamber of Commerce and Industry (CCI). She explains that banks have switched to a "savings model" and, due to the high risks, are unwilling to work with microbusinesses, and often even with larger companies. At the same time, revolving credit remains expensive despite the reduction in the key rate, as banks see the risk of default for some clients and increase interest rates, or in some cases simply reject applications, adds Kalinin of Opora Rossii.

source: The Moscow Times https://archive.is/q2bXa

In the first quarter of 2026, the debt collection market in Russia reached a three-year high. According to the National Association of Professional Collection Agencies, 14.4 million debts totaling 355.7 billion rubles were transferred to collectors. This represents a 10% increase in the number of debts and a 6.7% increase in the volume of debt compared to the previous year.

For the first time in the historical record, Russians' debt to microfinance organizations exceeded their debt to banks. In monetary terms, microfinance organizations transferred 163.7 billion rubles of debt to collectors, while banks transferred 156.5 billion rubles.

The total number of debtors in the country is growing. By the end of 2025, the agency debt collection market amounted to 1.5 trillion rubles. This represents a 39% year-over-year increase in monetary terms and a 59% increase in volume. According to the Central Bank of Russia, 49.7 million Russians had loans and credits as of July 1, 2025. Since the beginning of 2022, the number of such borrowers has grown by 7 million. As a result, two out of three working-age Russians owe money to banks and microfinance organizations. In the summer of 2022, 3.8 million people owed money to microfinance organizations alone, and by July 2025, this figure had risen to 6.3 million. The number of those with debts to both banks and microfinance organizations has grown even more significantly: from 3.5 million to 7.5 million.

The number of collection agencies has also nearly doubled in five years. According to SPARK, 446 such companies operated in Russia in 2020, and by 2025, their number had increased to 750.

source: The Moscow Times https://archive.is/T2HwL

Two major oil refineries supplying Moscow and the surrounding region have suspended operations after a series of drone strikes late last week, Reuters reports, citing industry sources.

According to these sources, Rosneft's Ryazan refinery ceased refining on May 15, and Gazprom Neft's Moscow refinery on May 17.

Infrastructure was damaged at the Ryazan refinery, which processes approximately 13 million tonnes of oil per year, accounting for 5% of Russia's oil refining, sources told Reuters. One of the sources said the refinery will be out of service "tentatively until the end of June."

Since last week, the Ryazan refinery has ceased selling fuel on the exchange, and traders who use it are, according to Reuters sources, seeking volumes from oil depots in neighboring regions.

The Moscow Oil Refinery, located in Kapotnya, with a capacity of approximately 14 million tons per year, completely halted refining on May 17 following a major drone strike in the capital, which killed three people and injured 12.

According to Reuters sources, the refinery's equipment was not damaged, but the plant halted refining to mitigate the risk of negative consequences. Resuming operations will take several days, the agency's sources said.

The Ryazan and Moscow oil refineries collectively produce more than 5 million tons of motor gasoline and over 6 million tons of diesel fuel annually. They are the eighth and ninth Russian refineries to halt production since early spring. Lukoil's Permnefteorgsintez and Surgutneftegaz's Kirishinefteorgsintez also halted refining in May. In April, drone strikes disrupted the Syzran, Novokuibyshevsk, Tuapse, and Saratov refineries, as well as Lukoil's Nizhegorodnefteorgsintez.

According to Reuters estimates, 11% of Russia's primary refining capacity was down daily from January to May due to drone strikes—three times more than during the same period previously. Refining throughput at Russian refineries dropped to its lowest level since 2009: 4.69 million barrels per day.

source: The Moscow Times https://archive.is/U670y

Russia needs a "swift end" to the war in Ukraine, as the country's economy cannot withstand a prolonged continuation of the SVO, stated State Duma Deputy Renat Suleimanov from the Communist Party of the Russian Federation. "Officially, 40% of the federal budget is devoted to defense and security. What development, investment, or capital investment can we talk about? Neither tanks nor shells have consumer value: the economy produces them, but they cannot be consumed by the population. They are pure expenses," Suleimanov said in an interview with the publication Continent Siberia.

According to him, large expenditures on the defense industry provide jobs, but at the same time lead to increased inflation and a reduction in social and investment budget spending. The deputy also emphasized that even after the end of the war, "colossal expenditures" will be required to restore the occupied territories, as well as support and reintegrate those returning from the front. "The special operation has already lasted longer than the Great Patriotic War. God willing, it will end in victory, not just an interim result," Suleimanov concluded.

According to the Russian federal budget for 2026, military spending will amount to 12.93 trillion rubles, and including security and law enforcement spending, it will reach 16.84 trillion rubles. Thus, the security forces will receive 38% of the budget, compared to 24% in the pre-war 2021. Meanwhile, the share of social spending in the treasury, on the contrary, will decrease from 38.1% in 2021 to 25.1% this year.

In January-April, the budget deficit reached 5.88 trillion rubles, or 2.5% of GDP, which is almost 3 trillion rubles higher than last year. The annual plan envisages a deficit of 3.79 trillion rubles, or 1.6% of GDP. Meanwhile, the Russian economy began to contract in the first quarter for the first time since 2023: GDP decreased by 0.2% year-on-year, while the decline in non-resource industries reached 0.7%.

In May, the government lowered its economic growth forecast for the current year to 0.4%. This is three times lower than the authorities initially expected, 2.5 times lower than the 2025 rate, and 10 times slower than the economic growth rate in 2023-2024. In the Ministry of Economic Development's "conservative" scenario, which is based on oil prices returning to $50 per barrel, the economy will end the year with a 0.5% contraction—the first since 2022.

source: The Moscow Times https://archive.is/aa3ni

Russian base stations, which provide wireless communication between a phone and the mobile network, transmit data 25% slower than their foreign counterparts and are 70% more expensive. This was announced by Beeline CEO Sergey Anokhin at a digital industry conference in Nizhny Novgorod, according to The Bell and Frank Media. He stated that the company is testing base stations from two domestic manufacturers, Yadro and Irtey. "Basically, every year there's talk that, yes, they're lagging behind, and it's not yet possible to install them in cities with over a million people," Anokhin noted.

His presentation indicated that the stations' minimum acceptable performance level was only reached in April 2026. This required multiple software rewrites. However, in their current form, the towers don't support all the required bands; in particular, the software for basic LTE functionality still needs further development. In addition to low data transfer rates, the stations provide 30% fewer successful connections and consume 1.5-2.5 times more power than existing market solutions. "The current implementation is primarily suitable for lightly loaded locations," the presentation noted. It also stated that reaching target station quality requirements is not expected until 2030.

Following the outbreak of full-scale war in Ukraine, Russian authorities required mobile operators to use only domestic equipment for future network deployments. However, due to a lack of development and mass production, the transition to Russian solutions was postponed until 2028. Operators were allowed to build networks using foreign equipment, but were required to enter into forward contracts worth over 100 billion rubles with Russian base station manufacturers. By 2030, these companies are required to supply operators with approximately 75,000 devices.

Previously, the head of the Ministry of Digital Development, Maksut Shadayev, said that telecom operators had resigned themselves to the need to purchase domestic base stations. "We went through the denial, when operators said, 'It's not our problem.' Then there was anger, when we said, 'Guys, you can't get away with it.' Now we see that the bargaining has already begun. [...] Everyone has resigned themselves to it and are asking the right questions: how many manufacturers, who will they be affiliated with, how much will it cost, how effective will it all be," Shadayev noted.

source: The Moscow Times https://archive.is/sc1Dr

The rapid slowdown in inflation recorded by official statistics hasn't affected how people perceive it. Estimates of price increases over the past year have risen from 14.6% to 15% in a month, while expectations for the coming year have grown from 12.9% to 13%, according to a survey conducted by the Public Opinion Foundation and commissioned by the Central Bank.

According to Rosstat, inflation in April was only 0.14%—the lowest for that month on record, with some weeks even reaching zero. In the first 12 days of May, when the survey was conducted, prices rose by 0.06%, and the ruble strengthened. "Absolutely damned inflation expectations. Maybe someone jinxed it," jokes Alexander Isakov, chief economist at Sberbank.

The increase in observed inflation was driven by lower-income Russians. Price increases hit them harder, so among those without savings, both observed and expected inflation is always higher than among those with savings. In the non-savings group, price growth estimates over the past year increased from 15.8% to 16.4%, the highest since September 2025, while among wealthier respondents with savings, they decreased from 13.4% to 13%. According to Rosstat, annual inflation in April was 5.6%. Inflation expectations, on the other hand, decreased slightly among those without savings (from 14.3% to 14.1%), but increased among those with savings (from 11.4% to 11.8%).

As a result, both estimates and expectations returned to their levels from a year ago. Economist Yegor Susin calls the current observed inflation figures effectively the annual average.

Other surveys yield similar results. VTsIOM measures inflation estimates and expectations over a one- to two-month horizon, rather than a year. Its inflation perception and expectations indices have remained virtually unchanged over the past six months. In April, more than half of its respondents called inflation "very high," while 30% described it as "moderate." In the next one to two months, 51% expect "minor" price increases, while 35% expect "significant" ones.

"The population has not yet felt a slowdown in inflation," Promsvyazbank analysts note. The perception of inflation is stable, as it contrasts with statistical data and the strengthening of the ruble (it gained 4% in the past month), they lament.

This perception is linked, among other things, to how people assess their financial situation. These assessments, as well as those of the state of the economy and its prospects, have deteriorated significantly this year. Half of Russians cited low income as their main problem, according to a March Levada Center survey, while February monitoring by the Institute of Psychology of the Russian Academy of Sciences (RAS) recorded an increase in financial anxiety and psychological distress across all socioeconomic groups. Joint surveys by the RAS Institute of Psychology and the Russian Public Opinion Research Center (VTsIOM) also found "an increase in the intensity of fears associated with rising prices," with 84% reporting this.

According to Gazprombank analysts, the slight decline in inflation expectations among people without savings is due to a decrease or slowdown in price growth for key commodities: tomatoes (-22% month-on-month), eggs (-3.3%), smartphones (-0.3%), bread (+0.2% after 0.7% in March), gasoline (0.5% after 0.9%), and clothing (0.2% after 0.7%). However, although inflation is slowing faster than the Central Bank's forecast, prices for almost half of the items studied on a weekly basis are rising "quite dynamically," Promsvyazbank analysts wrote.

source: The Moscow Times https://archive.is/LIRMg

Russia is preparing to reduce state support for farmers due to the federal budget deficit. According to Forbes, the Ministry of Agriculture has proposed reducing the subsidy rate for preferential loans for agricultural producers from 70% to 50% of the Central Bank's key rate. The explanatory note to the draft order cites "the lack of additional funding sources and a shortage of federal budget funds."

Preferential loans with 70% interest rate compensation are currently available for a number of priority areas, including seasonal field work, smallholdings, breeding and genetics, dairy farming, the purchase of domestic equipment, and greenhouse complexes for the Far East, Siberia, and the Kaliningrad region. With the current key rate of 14.5%, such a loan can be obtained at approximately 4.35%, and after the subsidy reduction, the rate will increase to 7.25%.

The Ministry of Agriculture explains the decision by lowering the key interest rate, which stood at 21% a year ago. The previous conditions will remain in place for enterprises in border areas whose operations were disrupted by military action, as well as for investment projects producing critically important drugs and additives.

Last year, state support for the agricultural sector remained significant. According to Valeria Popova, Senior Analyst at Rikom-Trust, instead of the planned 100 billion rubles in subsidies for preferential loans, farmers received approximately 250 billion, increasing the volume of preferential short-term loans to a record 732 billion rubles, a 15% increase from 2024. This year, the total volume of subsidized short-term loans will decrease by almost 40%, to 150.1 billion rubles.

This reduction in support comes amid the industry's high debt burden, notes Vasily Kutyin, Director of Analytics at Ingo Bank. "For many farmers, subsidized lending isn't a development tool, but a basic mechanism for supporting operational activities: financing sowing, purchasing seeds, fuel, fertilizers, and feed. The sector won't be able to completely abandon loans," the expert explains. "Borrowed funds fully cover production needs," explains Irina Bachurina, CEO of the Mokroe agricultural company in the Lipetsk region. Korbut confirms the high demand for loans: many farmers don't even have their own working capital for sowing.

According to Kutyin, at the current Central Bank interest rate, reducing subsidies means an increase in the actual cost of borrowing by approximately 2.9 percentage points. The changes will hit capital-intensive sectors with long payback periods the hardest: dairy farming, greenhouse projects, processing, construction of new complexes, and farm modernization. "We shouldn't expect any new support measures," says independent agricultural market expert Alexander Korbut.

This could be particularly painful for the industry amid deteriorating financial performance. According to Nadezhda Kanygina, an analyst at the Institute for Comprehensive Strategic Studies, pre-tax profits in agriculture fell by 25.7% in 2025, while those in crop production fell almost twofold, to 43.7%. Entire segments of the agro-industrial complex have become unprofitable, including greenhouse vegetable growing, sheep and goat breeding, and the production of vegetable and animal oils and fats.

The share of profitable companies continues to decline. According to Korbut, in January-February 2026, it fell to 72.7% from 80.8% the year before. In crop production, the number of profitable companies fell from 75.8% to 64.6%, and in livestock farming, from 85.5% to 78.3%. "The share of unprofitable companies raising pigs for meat fell to a historic low of 49.59% in January-February 2026, meaning every second enterprise was unprofitable... Everyone is hoping for at least some improvement in the market situation," he says.

Against this backdrop, the number of people wanting to start new businesses in the agricultural sector is already lower than the number of those shutting down. Last year, 1,468 new companies were registered in crop production, while 1,738 were liquidated. In livestock farming, 261 enterprises left the market, 147 in food production, and 874 companies in livestock farming, hunting, and related services closed.

source: The Moscow Times https://archive.is/iq23y

First Deputy Prime Minister Denis Manturov stated that Chinese automakers should not create direct competition for AvtoVAZ. "Our condition was that Chinese cars should not directly compete with AvtoVAZ," Manturov emphasized. According to him, Chinese companies are prepared to offer Russian buyers primarily electric vehicles and hybrids, that is, models in segments that do not directly overlap with AvtoVAZ's product lineup. At the same time, the government requires the highest level of localization from foreign manufacturers.

Manturov's statement comes amid AvtoVAZ's own problems with demand. On May 14, the company resumed operations after a nearly two-week corporate holiday. Officially, the holiday was explained by the modernization of production lines for the release of the new Lada Azimut crossover in the third quarter and work on the Niva line. However, dealers attributed the assembly line shutdown primarily to warehouse overstocking due to weak sales.

According to Avtostat, Lada's performance in March was the worst, with first-quarter sales down 17.4%. The start of this year was the worst for the Russian auto market in the last 20 years, stated Dmitry Kostromin, AvtoVAZ's Director of Sales and Marketing. "We made forecasts for how 2026 would begin. Unfortunately, it started even worse than we predicted. In my opinion, these are probably the worst January-February months in the last 20 years of statistics. If we slightly adjust the market calculation methodology and only consider new cars that are actually sold and registered, the actual market is even worse," Kostromin said.

By the end of 2025, 685,200 Chinese cars were sold on the Russian market. The top three most popular brands were Haval (173,300 vehicles), Chery (99,800), and Geely (94,000). During the same period, 329,900 Lada vehicles were sold in Russia. AvtoVAZ CEO Maxim Sokolov complained about dumping by Chinese automakers in Russia, which "has gone beyond all bounds."

source: The Moscow Times https://archive.is/MkjUY