February 24 2012, 11:47 Fruit-Inform

Ukraine's potato processing limited by expensive raw material and low consumption

In view of extremely low potato prices in Ukraine, farmers are highly interested in potato processing. However, the real situation is that potato processing in Ukraine is significantly behind developed countries' industry. According to Mr. Sergey Rybalko, President of Ukrainian Association of Potato Producers, as of today, Germany processes about a half of grown potatoes, and USA – almost 70% of them. At the same time, Ukraine's current processing volumes do not exceed 0.1% of total production.

“I would like to dispel an illusion of those farmers who think that potato processing can guarantee high prices and stable sales”, Mr. Rybalko said at the 4th International Conference “Potatoes & Vegetables of Ukraine – 2012”. “We have seriously studied starch production peculiarities in Ukraine and now I can clarify the situation. First of all, raw potatoes must have starch content of no less than 14%. Prices of raw potatoes must not exceed UAH 0.45-0.60/kg (EUR 0.04-0.06/kg) for processors to be able to secure at least 5-6% margin. It is clear that such price levels do not cover production costs in Ukraine, therefore we should primarily focus on lowering production costs”.

The expert also said that development of other segments of potato processing is very limited by Ukraine's small internal market, which is almost fully occupied by foreign suppliers.

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