August 14 2006, 09:43

Water-melons help raise good money in Ukraine

The analysts of "Agrooglyad: Vegetables and Fruits" journal regularly monitor the produce market of Ukraine; they point out a significantly increased margin in water-melon trade during past week.

According to information of Agricultural Marketing Project, past week producers in Kherson oblast sold water-melons for less than $0.03/kg on terms of customer pick up. Retail price for water-melons seldom declined lower than $0.29/kg in Kyiv and other large cities in Ukraine. So, producers earned not more than 10-15% of water-melon retail price. Traditionally, those producers enjoyed the highest margin who were able to purchase product for 0.08-0.1/kg in Kyiv and to resell water-melons for retail price $0.23-0.29/kg.

Wholesalers also purchased water-melon in Kherson and supplied to Kyiv; they were content with a quite lower margin, cause they gained profit due to large shipments. Those traders enjoyed the highest margin who controlled product purchase directly out of field in the southern region of Ukraine and who were able to sell water-melons and melons in retail in large cities.

To the opinion of the experts of the Agricultural Marketing Project, retailers make all efforts to keep water-melon price on a high level which seems quite affordable for consumers in large cities. However, we should expect retail prices for this commodity to decrease soon. Substantial extension of melon and water-melon cultivation areas is the basis for the mentioned trend; acreage extension is observed in the regions where the producers have practically not grown these crops before. Harvesting of cucurbits crops has just started in the mentioned regions, and it can make additional pressure on water-melon market soon. Water-melon and melon producers say the harvesting will be unprofitable if the price declines down to $0.01/kg on terms of customer pick up.

At the same time, the situation observed on cucurbits crops market means a good opportunity to make profit on commodity export. If water-melons are supplied to the EU countries, Ukrainian producer can get even higher price comparing to the previous year even with the account of all additional expenses. It is possible, of course, only if the producer or a group of producers will implement this idea independently. However, it is obvious right now that this year Ukraine is likely to export top record shipments of water-melon to the EU countries (Poland, Holland, Sweden, and Latvia). Water-melon also meets a great demand in Belarus.