Ukrainian raspberry market this week is seriously outraged by the procurement prices of raspberries for freezing advertised at a price of 12 UAH/kg, which is equivalent to 32 US cents or 30 euro cents per kg. The EastFruit team notes that these ads were placed mainly by intermediaries who planned to consolidate and resell raspberries for freezing at a higher price, so the cost of raw materials for processors in this case was slightly higher. However, this also forced raspberry processors to try reducing their procurement prices for these berries.
A little earlier, we reported that a number of Ukrainian farmers decided to stop harvesting raspberries, considering it unprofitable. According to market participants, the cost of raspberry harvesting ranges from 14 to 18 UAH/kg (38-49 US cents), depending on the region and yields. Therefore, the price of 12 UAH/kg in the vast majority of cases will not even cover the costs of harvesting of raspberries, not to mention other costs of growing. Accordingly, only small producers who do not use hired labor can afford to sell berries at such a low price.
“It should be noted that UAH 12 is not the lowest price offered to Ukrainian farmers for raspberries in local currency hryvnia. In the summer of 2018, prices even dropped down to UAH 8/kg, however, if prices are taken into account in US dollars, then today’s UAH 12 is equivalent to UAH 8 in 2018. But even this is not entirely correct, because dollar inflation was very high during this period. Accordingly, 32 cents in 2018 is equivalent to today’s 37 cents, considering official annual inflation rates of the US dollar. In other words, at present, the lower threshold of purchasing prices for raspberries in Ukraine in comparable prices is 14% lower than the all-time low of 2018,” says Andriy Yarmak, an economist at the Investment Centre of the Food and Agriculture Organization of the United Nations (FAO).
A detailed analysis of prices for previous years can be found in our Raspberry Price Cycles article published before the start of the 2023 season. By the way, in this article we forecasted market developments very precisely.
“In 2023 there is another unpleasant development for Ukrainian raspberry farmers – even in 2018, the prices for raspberries of everbearing remontant varieties were significantly higher than the prices for summer varieties. In 2023 on the other hand, the record low price was reached precisely during the harvesting of everbearing remontant raspberry varieties, which have never been sold for such a low price as now,” the expert notes.
Such a low level of prices for raspberries in Ukraine shocks not only local farmers, but also farmers and freezers in other European countries. Many of processors in Poland and Serbia still cannot sell stocks of frozen raspberries from the 2022 harvest, and have already formed a stock of a new crop, purchasing it at prices not lower than 1.1-1.2 euros per kg. In other words, freezers in Poland and Serbia, even this season, paid for raw materials on average 2-3 times more than freezers in Ukraine. Accordingly, they understand that the new season may turn out to be no less difficult than the previous one, when most of them suffered losses, while Ukrainian freezers, for the most part, made a profit.
“In 2023, Ukrainian freezers will most likely be able to make good money again. Even despite the decrease in the level of added value, they guarantee themselves, albeit a small, but profit. Such a strategy specifically during the wartime can be fully justified. It remains to be hoped that some of the freezers in Ukraine will still try to expand the geography of sales and increase their presence in the US and Canada markets, and we already saw the first signals of this in the first half of 2023. This is extremely important for Ukrainian raspberry producers because it is important for the country to maintain freezing capacities in order to get the highest possible price after the restoration of the world raspberry market, which is inevitable in the coming years,” adds Andriy Yarmak.
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