Information for fruit and vegetables business in CIS
The Apple Import Tax Has Decreased…..When Will the Prices?
In the past several months we have written many times that apple market in Ukraine has been waiting for the apple import tax decrease to take effect. Thus, the tax decrease was expected to cause significant decrease in apple prices in the Ukrainian market. In August 2005 the "Changes to Custom Tariff in Ukraine" came into effect and according to it the apple import tax was to decrease to 5% for the period between December 1, 2005 - March 31, 2006. The previous tax was EUR 0.5/kg. Under the new regulations a tax of 5% would not be more than EUR 0.02-0.025/kg if the common apple varieties cost EUR 0.4-0.5/kg.
Two weeks have passed since the tax came into force, but still we do not see a significant price decrease on apples. In fact, apple prices in the higher price segment have increased slightly. However, specialists are not quick to reject their pervious forecast of apple price decrease and import growth. Representatives from Polish companies are expected to be among the first to see the advantages of the import tax decrease. Presently, they indicate they have not yet been able to supply large volumes because of irregular custom clearances and other needed documents. The documents are being processed and apples are expected to come to Ukraine in a week or two.
Polish companies plan to import the largest volumes of apple in the medium price segment as they consider demand on expensive apples to be insufficient in Ukraine now. It is estimated that apples of the medium price segment will be sold at prices 15-20% cheaper than currently available. Even after import and VAT tax importers will still be able to operate profitably.