Information for fruit and vegetables business in CIS
Potato supply increased on Ukrainian market, still the prices remain top record
Developing potato deficit in Ukraine became a surprise for many market players this year. Indeed, potato is "the second bread", and for some Ukrainians it is even on the first place. As a result of insufficient potato supply wholesale and retail prices have jumped up. Today wholesale price on potato reached USD 0.33-0.35/kg in Kyiv, and exceeded USD 0.39/kg in some regions. Today's potato price surpassed 4-5 times the price level observed a year ago; the majority of market players expects further price growth in the coming months.
At the same time, the results of daily monitoring of tomato wholesale prices prove the growing supply of this produce, as a result of the significant price increase. Andriy Yarmak, Deputy Director of the Agricultural Marketing Project (AMP) thinks that there is a very attractive opportunity to sell potato now than to store it, as potato production cost is USD 0.04-0.06/kg, and the sales price is USD 0.29-0.35/kg as of today. Many producers decided to get high profits right now and avoid storing and other losses, although the further price growth has been prognosed recently. We'll mention that this year the rate of return for potato exceeds 400%, according to evaluations of the Agricultural Marketing Project. Potato producers will earn net profit up to USD 5,000-6,800/ha.
Studying the reasons for potato price growth, AMP specialists note the decrease of potato production in private houseplots. Villagers go on growing potato for own needs, which partially comes on market; many inhabitants of large, medium and small towns are absolutely right to give up the idea of potato production on private plots, considering it not feasible. The number of farmers - professional potato producers is constantly growing in Ukraine. However, farmers' potato production seems to grow by significantly slower rate, as private producers on houseplots decrease potato production much faster.
It is interesting to mention that this year potato production decrease is observed in the majority of European countries. According to the experts' evaluation, this season potato deficit will overpass 3 mln. tons; average prices on this produce have started to grow already. According to the tentative prognoses of AMP experts, potato acreage will be extended much in Ukraine and other European countries as soon as in 2005. Most probably, Ukrainian producers will face seed potato deficit in spring 2006.
You can get more information about the long-term and mid-term perspectives of potato production in Ukraine from the leading experts of the industry during the second international conference "Fruits and Vegetables of Ukraine 2005" to be held on December 5th-7th, 2005, in Kyiv National Complex Expocenter of Ukraine. We remind that the conference will coincide with the international produce exhibition to demonstrate all the elements of modern production technologies, post harvest handling, processing, storing and marketing of the produce.