However, food prices rose more slowly than anticipated.
Officials blame the situation on the substantial increase in the price of grain.
In an effort to counteract the smuggling of cheaper alcohol across borders, the government announced that new excise stamps will be required on all imported liquor as of January 1, 1995. While Chinese officials admit that the poorer quality of Chinese goods led Russians to purchase higher priced Western goods, they also cite the primitive state of the Russian banking system as another obstacle to effective trade. Trade between the two countries developed quickly without the necessary laws and regulations in place to cope with trade agreements. The prices were effectively doubled or tripled to place grain prices at world levels. At these rates, Russians should expect to buy bread at around 1,500 rubles per kilogram.