September 22 2006, 10:04

Wholesalers inflate prices for potato and vegetables of Ukrainian origin

According to information of price monitoring service of "Agrooglyad: Vegetables and Fruits" journal, despite of the production growth forecasted for potato and root beets in Ukraine, the prices for these commodities remain relatively high, and even exceed the past year price level.

As of September 22nd, an average wholesale price for potato exceeded more than twice the average wholesale price observed at the same period of time past year on Kyiv wholesale market FARMER. An average wholesale price for this commodity is 40-45% higher comparing to the previous year even in such "potato" region as Lviv oblast. According to estimations of the Agricultural Marketing Project, potato production will grow 15-25% this year in Lviv oblast.

At the present moment the price for bulb onion is in average 30-35% higher than a year ago. Bulb onion prices exceed 20% the past year level throughout Ukraine. Good expectations for carrot harvest have no impact - carrot is still sold 20-30% more expensive than a year ago. Only the prices for table beet are 10% lower than in September 2005.

To the opinion of Andriy Yarmak, the Deputy Director of the Agricultural Marketing Project, one of the reasons for such price situation is the significant growth of investments to the infrastructure of the produce business of Ukraine which has been observed for the recent two years in the country.

"Some time ago wholesale companies' activities were limited to the commodity purchase from the farmer and produce supply to the consumer actually at the same day. Now they have started to actively invest into own modern storages and warehouses, the equipment for post harvest handling, grading, washing and packing of fruits and vegetables. The wholesale companies are eagerly developing the long-term cooperation with the producers", the expert says.

As a result of this process the demand for potato, onion, root beets and fruits suitable for long-time storage is distributed over time in a different manner. In the harvesting period of these crops the wholesale companies are performing the most aggressive purchases which result in price growth for the mentioned commodities. So, many farmers prefer not to store the grown commodities due to a very good price they have just after harvesting. Only those producers store produce who manage own modern storages. After the produce arrives to the storages of wholesalers and large farmers, they are trying to sell it profitably, contributing to further price growth.

However, to the opinion of A. Yarmak, in line with the growing number of wholesalers and volumes of the commodities they purchase, the threat of incorrect market evaluation arises. The thing is, the quantity of produce on market does not reduce. So, it is possible that the price for a certain crop will be lower in January-February than during the harvesting period. Moreover, such situation has already occurred for the several times on vegetable market of Ukraine.

Nevertheless, the market experts, and also the representatives of supermarkets, think that there are plenty of possibilities on market of wholesale fruit and vegetable trade in Ukraine.

This situation can illustrate high interest of Ukrainian and foreign wholesale companies to the third international conference-exhibition "Fruits and Vegetables of Ukraine 2006. Open market" to be held December 5th-6th 2006 in Kyiv, on the territory of the National Complex "Expocenter of Ukraine". That's why the organizers of the third conference included the specialized forum in the program; the forum will be dedicated to the most interesting questions of wholesale and retail trade of vegetables, fruits and berries.