August 23 2006, 16:36

Producers overestimated capacity of cherry-tomato market

Canneries - producers of pickled cucumbers and tomatoes add canned cherry-tomatoes to the assortment of the produced commodities in order to broaden it. As a rule, cherry-tomatoes together with gherkins average not less than 10% of canneries' output of pickled vegetables.

However, the managers of processing enterprises point out lack of great demand for canned cherry-tomatoes on national and Russian markets. These commodities are purchased mostly in order to extend the assortment. And, 95% of canned vegetables of Ukrainian origin are sold on inner and Russian markets.

Favorable weather let the producers of cherry-tomatoes have a good harvest this year in Zakarpattya, as well as in other regions of Ukraine. However, seemed success actually turned out to be a great problem for the producers.

Five Zakarpattya canneries produce pickled cherry-tomatoes. Most enterprises grow cherry-tomatoes on their own fields, as this product is practically non-transportable and highly sensitive to dramatic weather changes. Own fields of cherry-tomatoes let the canneries eliminate the risk of poor supply of this specific raw material.

There are four canneries in Vinorgadiv rayon which are the largest ones for Zakarpattya. In addition, not less than 10 ha of cherry-tomato are cultivated there by local population. Canneries, farmers and local people have good harvest; so rural population suffers the most because of no opportunity to sell the product. The supply exceeds demand. Some processing enterprises are oversupplied with cherry-tomatoes of own production; they either do not purchase this commodity from the population or buy insignificant volumes of cherry-tomatoes for up to $0.29/kg. Allegedly, some canneries had set up tomato cherry supplies from China, as they would never expect abundant supply of locally grown product. We would like to remind that canneries purchased cherry-tomato for $0.39-0.49/kg past year.

Working on saturated market, farmers understand the necessity to think about sales before sowing seeds. It especially concerns crops which require high production costs, such as cherry-tomato. For example, the production cost of tomato-cherry is not less than $0.11/kg on the stage of harvesting. Cultivation areas of tomato cherry are likely to be reduced next season. Those producers, who are going to continue growing cherry-tomatoes, will probably ask processors mention minimal prices and purchased shipments in the supply agreements.