Information for fruit and vegetables business in CIS
Price growth on cabbage will go on
Many players of fruit and vegetable market of Ukraine were quite surprised by low prices on white headed cabbage observed this season. Taking into consideration the fact that cabbage production in 2004 was considerably lesser than in 2003 (on 19%, according to the assessments of Agricultural Marketing Project (AMP)); prices were even lower than in the previous year. It was a result of the production that as before exceeds a bit the estimated inner demand of Ukraine.
At the same time, the analysis of fruit and vegetable reserves, conducted by AMP specialists in the beginning of February 2005, proved the assumption that the volume of cabbage stored by farmers as to the beginning of February 2005 is twice lesser than in the same period in 2004. This fact is connected with the galling experience that the cabbage producers had past season - in the end of season the cabbage price level dropped down lower than it was during the harvesting period, so farmers saw no sense in storing cabbage and were trying to sell it as quick as possible.
It means that cabbage reserves have not disappeared; they just were moved from farmers to consumers and other market players. However we should note that this year white headed cabbage is consumed in faster rates as a result of the poor harvest of cucumber and tomato.
At present moment the deficit of cabbage supplies done by the farmers is observed on market, and it has already led to a rapid price increase: only past week cabbage prices increased on 15-40% depending from the region. As it was reported, the retail prices on cabbage have already grown up to USD $ 0.37/kg in some oblasts.
The majority of market players thinks that prices are going to grow further, cause the significant cabbage supply from farmers, which was expected earlier, is not taking place at the moment.
According to the recent prognoses of Agricultural Marketing Project, farmers have an intention to increase the acreage of cabbage producing lands on 5-7% next year, however cabbage production rate is unlikely to increase, cause the analysts find it nearly impossible that the favorable weather conditions for cabbage production in 2004 could recur in 2005.