Information for fruit and vegetables business in CIS
Carrot Prices Increase
By the end of the holidays consumers observed a 15-25% increase in carrot prices compared to the previous level. At the Kyiv and L'viv wholesale markets average carrot prices grew by $0.03/kg and $0.06/kg respectively, with costs now at $0.39/kg in Kyiv and $0.23/kg in L'viv. Anatoliy Yarovoy, Price Monitoring Specialist of the Agricultural Marketing Project, points out that carrot supply is now limited and there are few large sets for sale.
Short supply and the consequent price increase may be caused deliberately as suppliers plan to store carrots longer and wait for a better price rather than release carrot reserves, specialists speculate. Vendors still remember the crisis in carrot supply observed late last spring, when carrot prices exceeded top marks and wholesale prices reached $1.37/kg. The experts explained this situation by poorly stored carrot reserves from the 2004 harvest and by market spontaneity. Many companies sold carrot stocks prior to this, as they never expected carrot prices to reach such high levels. Naturally, many of those in the market now are tempted to store their carrots as long as possible hoping for the same situation to occur this year.
According to estimates from the Agricultural Marketing Project (AMP), carrot acreage increased by 6% in 2005 from 2004. However, yield was lower as carrot production decreased by 9% in 2005 compared to the previous year. At the same time, harvested carrots are of good quality and are able to be stored for long periods of time.
Carrot producers recorded good demand on their products this year. The Eastern region of Ukraine, which includes the Donetsk, Dnepropetrovsk and Lugansk oblasts, was traditionally active in purchasing carrots. The greatest deficit and the highest prices are observed in this region and carrots costs 50-100% more than in the regions where they are produced. Insufficient carrot reserves are compensated by the harvests in Volyn, Rivne, Cherkasy, Chernygiv and other oblasts.
Players in the market say that more carrots have been put into storage this season than in the previous year. This fact was confirmed by the increased demand on high quality carrots being fit for longer storage. If carrots are stored well, as assume now, than we will not observe the same price increases as in the summer of 2005. It is important to mention that excessive carrot reserves can result in a price collapse before the new season meaning those involved will keep a constant eye on the carrot market.