October 14 2010, 13:12 Fruit-Inform

As to expert, there is no necessity in abolition of duty on potatoes

According to Andrey Yarmak, Head of Project Fruit-Inform, there is no necessity in abolition of duty on potatoes, which possibility is informed in mass-media.

“Potato production in Ukraine in 2010 decreased slightly and was at average level of the last 5 years. Besides this, potato harvest in this year was higher than, for example, in 2007”, - expert notes. In addition, according to Andrey Yarmak, wholesale prices for potatoes were decreasing within the last 3-4 weeks, and demand is rather low as for this period of year. Increase of prices in September was provoked primarily by unprofessional declarations in mass-media.

According to specialist's opinion, relatively high prices for potatoes are a good opportunity for Ukrainian producers to create certain reserves for investments and further expansion of professional potato production, storage and processing that creates prerequisites for decrease of prices in long-term prospect. “If to decrease duty now, Ukrainian government will not solve problems of high prices, as they will not significantly fall (prices for potatoes are high in all European countries). But it will create competition for professional potato producers, as they will lose means for further expansion of potato areas and storage facilities. This means that possibility of significant lowering of prices in 2011 and 2012 is limited”, - Andrey Yarmak tells.

According to his opinion, instead of making farseeing decisions on its own, Ukrainian government blindly copies activities of Russia. But situation in the Russian Federation is absolutely different, as duties on potatoes and other food categories in Russia are many times higher than in Ukraine, also Russian production has never satisfied demand at domestic market. As for Ukraine, even in most difficult years, it has never been supplied with more than 1-2% of overall potato volumes needed to satisfy demand at market. This year, in case of keeping duty in effect, imports will not exceed 2% of volumes at market.

“That's why, if import duty on potatoes will be abolished, this will be another populist decision with negative effects on Ukraine”, - Andrey Yarmak thinks.