October 23 2006, 10:36

Fruit and vegetable production develops slower than inner trade in Russia

Russia occupies 11th place as a produce grower and the second place as potato grower in the world. But, the country pays too little attention to the produce growth development. Andriy Yarmak, the Deputy Director of the Agricultural Marketing Project made this conclusion in his report during the first international conference "Produce Business in Russia 2006".

The continuous increase of the share of the imported produce in the fruit and vegetable consumption in Russia justifies this conclusion. At the present moment around one third of vegetable consumption and more than a half of fruit consumption are covered by means of the imported commodities. Vegetable production has increased only 22% in five recent years; vegetable import has grown nearly thrice during the same period of time. To the opinion of A. Yarmak, fruit production is developing slower than vegetable growing in Russia. This fact speaks for the perspectives of the further growth of the imported produce share on this country market.

To the experts' opinion, one should look for the reasons for these trends in the forward development of the wholesale trade. The advanced wholesalers try to secure the growing needs of the even more intensively developing retail chains. The wholesalers find it easier to work with the imported products which large and medium shipments are supplied whole year round. Imported produce corresponds to all requirements to quality and packing. At the same time, most Russian producers would like to shift the function of handling, sorting, packing and even storage of fruits and vegetables onto wholesale companies.

In is interesting to mention that the contrary trend is observed on Ukrainian market. The production is developed here faster than inner trade. As a result, many large and medium producers have to actively invest money to the own infrastructure of produce handling and storage in order to provide rhythmic supplies directly to retail chains. The differently directed trends of market development in two neighboring countries create many opportunities for the profitable business between Ukraine and Russia. The participants of the Russian conference decided to discuss these opportunities on December 5th- 6th 2006 in Kyiv during the work of the third international conference-exhibition "Fruits and Vegetables of Ukraine 2006. Open Market". We remind that only 4 weeks are left to register for participation in the conference!