April 17 2007, 15:28

Processors reduce own vegetable cultivation areas

The ""Agrooglyad: Vegetables and Fruits" journal" gets information from the representatives of the enterprises - produce growers and processors about the fact, that many of them will turn to the raw materials purchase from the professional producers, in order not to grow the produce themselves. Many canneries still have significant excess of canned vegetables in stock, so that they plan to fully quit growing cucumbers and tomatoes.

According to evaluations of the Agricultural Marketing Project, more than a half of the canneries of Ukraine produced raw materials independently in the previous years. The market leaders preferred focusing attention on the processing and marketing of the ready produce. They reasonably believed that it is up to higher prices to make money, but not the doubtful economy provided by the own production of raw materials. At the same time, smaller processors preferred grow raw materials themselves. However, in many cases the production cost of the own raw materials exceeded the price for which the same produce could be purchased from the farmers. The quality of the own production not always met the requirements. Moreover, such enterprises took additional agricultural risks and were in want of the additional loan funds.

The reduction of the own vegetable production at the canneries is a positive sign for vegetable growers who seem to get additional opportunities to sell their produce. However, the plants have already claimed about the significant reduction of vegetable processing plans, so that the demand for the vegetables grown by farmers will probably decline significantly in 2007.