Information for fruit and vegetables business in CIS
Why does price on onion increase on Ukrainian market?
The analysts of fruit and vegetable market asked themselves in the previous year - why did onion get up in price? Production of this commodity increased significantly throughout all factors comparing to the previous year, even in such a way that the serious overproduction of onion market was boiling up. Of course, at the present moment wholesale prices on onion in Ukraine are nearly three times lower than in the previous year, still many experts expected them to descend even lower.
Agricultural Marketing Project specialists are carrying out survey now among vegetable and fruit producers with the aim to define the market development trends in the next year and to evaluate the market situation observed in 2004. First results of the survey prove that many producers who were planning to grow onion in 2004, at the last moment listened to the specialists' advices and changed plans; they understood that probably they would not get a good price for the produced commodity. Many farmers were simply not able to purchase seeds.
So, we already can presuppose that onion production growth was not as rapid as it was expected earlier. The second factor which influenced the price increase, to the opinion of market players, was the insufficient supply of high-quality onion as a result of excessive dampening of the ground during the vegetation period. Probably, because of that reason a part of onion for storage was simply spoiled.
One of the most significant factors that influenced onion market of Ukraine recently was the destruction of contraband supply scheme of the cheap onion from Poland (where the overproduction of onion is also observed this year) to the western oblasts of Ukraine. This factor led to demand growth on locally produced onion, supplied from southern and central oblasts of Ukraine and influenced the price situation in the whole country. By the way, partially because of the same reason prices on apples remain on the comparatively high level, and there are nearly no Polish apples on markets of the central regions of Ukraine.
We should remind that Odesa, Cherkasy and Kyrovograd oblasts are the leaders of onion supplies within the country, and the city of Kyiv, Donetsk, Lugansk oblasts, and AR Crimea suffer most from the deficit of onion.