July 8 2005, 18:17 Agrarian Marketing Project

Gas is growing expensive that may affect the greenhouse industry in Ukraine

Greenhouse complexes are alarming about the possible price growth on gas. We'll remind that recently Russia has declared about the possible price growth on gas supplied to Ukraine up to $160 for 1,000 m3. Still the price on gas is luckily to stay on the previous level - about $50 for 1,000 m3.

"If the state management let gas grow expensive till the price level mentioned above, we will be forced to leave the market because of the enormous self-cost of the produce", the director of one of the greenhouse complexes said. Gas for the greenhouse heating is 20-40% in the greenhouse production cost system. Moreover, the older the technology of the greenhouse construction is, the more gas it needs for heating. So, the price growth may hit most of all that greenhouse complexes which are utilizing greenhouses constructed in the time of the former USSR and the least energy-saving in regards of the gas consumption.

To the experts' opinion, the more expensive gas may less affect the greenhouses producing flowers and ornamental plants. The gas cost is lower in the production cost structure for these commodities. So, we can expect many enterprises switch from greenhouse vegetable to flower production.

The greenhouse producers say that there is no alternative to gas at this moment. The producers of the solid fuel power generators (working on wood, peat, straw) do not agree to this statement; though we have to admit that these power generators are complicated to utilize for the large industrial production.