Information for fruit and vegetables business in CIS
The severe deficit for garlic in Ukraine is leading to the dramatic price growth
The price on garlic on the wholesale produce markets of Ukraine reaches USD 1.4-2/kg; in June this commodity cost USD 0.6-0.8/kg. Such price level is extremely high for the season; usually early garlic was supplied on market in July and cost high, and after the bulk supply of the newly harvested garlic the price used to decrease significantly.
We outlined the reason for the dramatic price growth on garlic a year ago. The dynamic development of Ukrainian food industry, particularly the increase of the quantity and capacity of canneries is leading to the constant growth of demand on garlic. At the same time, nearly all garlic in Ukraine is produced on the private house plots; practically no one produces the industrial volumes of this commodity. Besides, there is factually no information on the modern technologies of the industrial garlic production, despite of the fact that growing this product a farmer can earn surplus profits, according to even very approximate evaluations.
The other reason for price jump on garlic may be a certain decrease of the illegal import due to the stricter custom check. We'll remind that the import tax on garlic is EU 0.2/kg, so the import is expensive enough. However, in view of today's wholesale prices on garlic we can expect the import growth from other countries, in particular from the neighboring Poland, and also from China. We'll mention that Ukrainian producers do not purchase Chinese garlic as they find this product not suitable for the national recipes. Still, you can purchase garlic supplied from China in supermarkets nearly all year round.
One way or another, the settled price on garlic made happy a few producers ready to supply great volumes of this commodity. They have not expected to sell harvest on more than USD 1/kg. Each hrivnya added to the price on garlic brings the producers the additional profit of about USD 26 mln., as the annual garlic production in Ukraine is 130,000 tons according to the data of the official statistics. We can only hope that high price on this commodity makes the producers interested in garlic, and the industrial production of this perspective and profitable crop starts to grow in Ukraine as soon as next year.