Information for fruit and vegetables business in CIS
Raw material zones for vegetable and fruit purchase are contracting under the influence of price growth for fuel and lubricants
The information constantly obtained by Agricultural Marketing Project from the regions proves that many processing enterprises and wholesale companies are forced to contract their purchase zones for fruit and vegetable commodities because of price growth for fuel and lubricants. The processing enterprises are seriously thinking over the possibility to invest the raw material production close to the enterprises, as a rule within a radius of 50-70 km. Wholesale companies usually need a wide assortment of the commodities, so they also try to concentrate to the maximum the raw material purchase zone close to the final consumer.
This state of things may lead to such situation when the producers of the most remote from the center regions of Ukraine as Zakarpattya, Lviv, Volyn, Lugansk oblasts and AR Crimea will be pressured to produce only those fruits and vegetables which will be fully consumed within the region, cause it will be very problematic to sell the excess of the produced commodities. Right now you can observe the extending difference between vegetable prices in the most regions-consumers and regions-producers. For example, wholesale price for potato in Kyiv is up to USD $ 0.11-0.12/kg; in some western regions of Ukraine you can purchase potato for USD $ 0.04/kg. There is the same situation with cabbage. The prices for cabbage in Cherkasy oblast are rather high, and in Zakarpattya the overproduction of this commodity is observed.
Besides, the increase of expenses for fuel and lubricants may lead to the sufficient price growth for those vegetables and fruits which are not produced in some regions. For example, prices for potato in AR Crimea and Donetsk oblast may go up comparing with the previous year, despite of the general potato production increase in Ukraine in 2004.