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Raspberries of Ukraine: collapse in prices and calls for a boycott of raspberry freezing companies

According to EastFruit analysts, the procurement prices for raspberries in Ukraine cause a real shock among farmers, despite the fact that the season has just begun. Many small producers complain that local raspberry freezers offer no more than UAH 20 per kilogram of berries delivered to factories, which corresponds to $0.54 USD per kg.

While such a low price is usually offered to small-scale farms offering average quality raspberries, higher quality berries are sold at a higher price. At the same time, since it is only beginning of the season, farmers do not rule out that as the harvest progresses, prices may drop even more.

It means that the purchase price paid by freezers for raspberries in Ukraine is on average 4 times lower than a year earlier and 5-6 times lower than at the same time in 2021. Given the situation, farmers are calling on social networks to boycott raspberry deliveries to freezing plants and even to boycott the work of the plants themselves.

Ukraine is the third largest exporter of frozen raspberries in the world after Serbia and Poland, and it has been having a major impact on the global raspberry prices in the recent five years. Despite a usually high BRIX in the raspberries from Ukraine, it usually exports frozen raspberries cheaper than other countries. In 2023 Ukraine, according to Fruit-Inform.com analysts, Ukraine is expected to harvest yet another record raspberry crop. However, freezers were expected to purchase less berries as they still have stocks of frozen produce from 2022 and do not have financial resources to procure more berries.

Thus, the majority of outraged farmers do not understand that their boycott will only lead to an increase in their losses, but it will definitely not change anything in the lives of processors. After all, it will be impossible to store fresh raspberries on bushes or even in a refrigerated room for even 2-3 days, and the freezers were already planning to sharply reduce the volume procurement anyhow.

In addition, today it is much more profitable for freezers not to process raspberries at all rather than to buy them at higher prices than declared. We published a detailed analysis of the difficult situation in which processors found themselves not only in Ukraine, but also throughout Europe and other countries of the world in the material “Frozen raspberry market before the start of the season: prices, demand, market forecasts for 2023“.

“Unfortunately, many market participants quickly forget what happened quite recently. Back in 2018, procurement prices for raspberries of non-premium quality in Ukraine dropped to UAH 8-10/kg, which was equivalent to 30-40 US cents per kg. And then the situation on the world market was much better than it is today,” says Andriy Yarmak, economist of the investment department of the Food and Agricultural Organization of the United Nations (FAO).

He also reminds that two years ago EastFruit experts warned about the high probability of a collapse of raspberry prices in the “Second raspberry boom in Ukraine?” analytical article, which received a lot of feedback with majority of people claiming that it is impossible for the raspberry prices to collapse.

We should note that Ukrainian farmers were still in some sense lucky in the previous season (see the article “Ukraine is the only country in the world that made money on raspberries in the 2022/23 season“), because the situation in Serbia and Poland is much more complicated. Also, this year, raspberries were not bought for freezing at all in the countries of Central Asia, where the season has already ended. And this led to big losses for local farmers in Uzbekistan and Tajikistan.

“The raspberry market follows a definite and fairly predictable cycle. However, if you approach it professionally, focusing on quality and marketing, this segment of agribusiness remains very profitable,” explains Andriy Yarmak.

Especially for participants of the global the raspberry market, EastFruit experts prior to the season have published an analytical article-manual “Raspberry price cycles“. This would allow anyone to develop a the most profitable strategy for the raspberry market and avoid unpleasant surprises in the future.

Also, farmers often forget that the fresh raspberry market is a completely different business, which is also subject to cyclicality, but it is much less pronounced there. However, the volume on the fresh market is also much smaller than on the frozen one. At the same time, if the grower learns to ensure cooling, transportability, packaging and regular deliveries of berries, many supermarket chains in Ukraine and other countries will be very happy to source from such suppliers and will be able to pay a much higher price for this product than what processors pay for raspberries for freezing. However, production technologies, varieties, handling, marketing and everything else in this business is going to be very different too.

EastFruit

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