May 30 2006, 11:27

Potato price declined 40% during two months

According to the results of price monitoring conducted by "Agrooglyad: Vegetables and Fruits" journal, the prices for potato of 2005 harvest continue declining. Late March 2006 an average wholesale price for national potato was 0.39-0.5/kg depending from the region; today the price fluctuates within $0.23-0.35/kg. Unlike the first quarter 2006, there is no problem to buy potato now.

Such situation is untypical for market; it indicates the gaps in the forecasts done by some market players, to the opinion of Maxim Yenchenko, the Market Information Specialist, the Agricultural Marketing Project. Second half of May and June were characterized by the maximum potato prices in previous years; the growing storage expenses logically explain this trend. But, season 2005/2006 was not typical. Just after the end of potato harvesting season the producers realized that significantly less than usually potato volumes were gathered. The reasons for production decline were yield decrease and acreage reduction recorded in the private houseplots. Worrying about potato purchases, wholesale companies and storages hurried up to buy and fill up stocks. At the same time, producers observed price growth and did not want to sell harvest. As a result, the price growth started just after the end of harvesting period and continued till April 2006. Potato prices reached top records, especially during February frosts which did not let the producers open storages. The stored root crops were in danger as well.

Some companies have to sell potato stocks for less attractive prices now than a month ago; despite of this fact, the ending season was very profitable for potato business. According to the evaluations done by the analysts, twice as less potato volumes were sold this season, but the sales profits are doubled comparing to the results of 2004/2005 season.