July 14 2006, 12:56

Cabbage price is expected to be low in season 2006-2007 in Ukraine

The analysts of the Agricultural Marketing Project (AMP) leave unaltered the forecast of cabbage production in Ukraine made in March 2006; according to it cabbage production will grow 34% comparing to the previous year in our country. If the forecast is confirmed, more than 2 mln. tons of cabbage will be harvested in Ukraine. It will be the absolute record for the recent years. Such volumes of cabbage production will be reached mostly due to the increased cultivation area (30% growth according to the forecast), as well as due to 7% yield increase.

The main reason for cabbage acreage growth is high cost-efficiency observed during two recent years. Relatively easy agri-technology and minor requirements to storage conditions let the producers rapidly increase cabbage acreage and store rather large volumes of this crop.

However, the specialists advise to be careful while making decision as for cabbage production. "Cabbage is one of the most risky crops regarding market price fluctuations. Even if the consumption is very stable, the fluctuations of cabbage production can result in price shocks. As a consequence, there is threat of the complicated cabbage sales in case of excessive supplies", Maksim Yenchenko says as the Market Information Specialist of the Agricultural Marketing Project. The specialist reminds that in April of season 2003/04 companies had to sell cabbage for a very low price because of overproduction. Prices fell down to $0.01-0.02/kg. This year cabbage production is expected to exceed the level of 2003. Cabbage consumption has grown as well. In particular, the year 2005 was the first when a lot of processing enterprises paid attention to this crop. They purchased a certain volume of cabbage; however, processing industry still consumes insignificant volumes comparing to overall cabbage production.

In conclusion, in season 2006/07 the specialists forecast cabbage price to be lower than in season 2005/06. In season 2005/06 producers sold cabbage for an average price $0.39/kg; with a great share of probability, in season 2006/07 the price can decrease 20-40%. However, the prices can be substantially corrected. At the present moment cabbage price is 10-20% lower than the price for cabbage recorded at the same period of time a year ago.