Information for fruit and vegetables business in CIS
There will be more vegetables in 2006
This year was really unusual for the produce business of Ukraine. First, increased demand and poor harvest of many vegetable crops resulted in the insufficient supplies of the produce. Second, vegetable prices were very high this year. Cucumber, onion, potato, cabbage, pepper, red beets and many other crops grew expensive 50-200% comparing to the previous year.
The rapid growth of processing capacities continued in 2005. The volumes of the produce grown on private houseplots decreased, as the population incomes increased, as well as the demand on better quality products. Import taxes on the considerable part of the produce were reduced in 2005, so that Ukrainian market is more open for the foreign products now.
In conclusion we should say that this year turned out to be very successful for vegetable producers. The ratio of sales price to the production cost often constituted 100%. We can say that in 2006 many producers will take a chance to invest additional money to such a profitable business and produce much more vegetables.
Extension of the production can be very significant for such crops as cabbage, onion, carrot, red beets, potato. It is easy to increase acreage of these crops, no large investments are needed. Cucumber, tomato, pepper, egg-plant, cauliflower, lettuce and other vegetables' production will probably grow a little bit less, but still significantly. This segment development is somewhat limited by the necessity to invest more, and to bear more risks while implementing production technologies for these crops.
Despite of the prognosed increase of vegetable production, experts say that Ukrainian farmer should not be threaten by vegetable overproduction and respective price decrease next one-two years. However, this situation is possible for some definite crops with the stable consumption level. For example, even insignificant overproduction of cabbage, carrot, potato may lead to a remarkable price decrease. It is easy to increase these crops' production, so such situation is quite possible. At the same time, the overproduction of cucumber, also suitable for processing, pepper, lettuce seems unreal to this moment.