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Ukrainian fruit and vegetable exports collapsed during the COVID-19 pandemic

EastFruit analysts report that during the global COVID-19 pandemic (February – June 2020), Ukrainian fruit and vegetable exports fell 43% compared to the same period last year. During this period, Ukraine’s revenue from the trading of vegetables and fruits decreased to $ 58.5 million. A year earlier, for the same period, the export revenue of the Ukrainian fruit and vegetable sector was $ 101.3 million.

Three product groups, namely walnuts, frozen berries and fruits, and fresh apples, provided 64% of all export earnings during this period. A year earlier, during this period, these commodity items accounted for 74% of all Ukrainian fruit and vegetable exports. Accordingly, the drop in exports for key export groups has become the most significant, and the revenue from their exports has decreased precisely one and a half times in relation to the last year. Besides, if in 2019 during this period, the primary revenue to Ukraine was provided by the apple (about 40%), then in 2020, the apple was only in third place in terms of revenue after nuts and frozen berries and fruits with a specific weight of 16%.

“Most of all, during the COVID-19 pandemic, the export proceeds from the export of Ukrainian apples decreased by 4.5 times, although the average export price was significantly higher than last year! However, the COVID-19 pandemic has nothing to do with it,  instead, it stimulated the demand for apples in the EU countries and inflated prices for it. Unfortunately, the apple harvest in Ukraine in 2019 was relatively low, and domestic demand only increased against the background of a cold spring and quarantine. Therefore, high prices on the domestic market and a shortage of apples made export unprofitable,” explains Andriy Yarmak, an economist at the investment department of the UN Food and Agriculture Organization (FAO).

In the export of apples for the period from February to June 2020, Ukraine lost the most significant export earnings in relation to 2019 – about $ 26.6 million. Walnut was in second place in terms of the volume of decline in export earnings in this period. A decrease in the proceeds of exporters from the supply of walnuts abroad amounted to $ 9.4 million, or 36%.

“However, the situation with walnuts is fundamentally different from the situation with the export of apples. In this case, the dependence of the decrease in export volumes on the global coronavirus pandemic is visible. The season started in October 2019 with a record export rate, and the first three months of the season gave walnut farmers good revenue. However, already in January 2020, when China was quarantined, export demand dropped sharply, and export earnings were consistently lower than last year. Besides, the demand for Ukrainian walnuts in Turkey dropped sharply. Deliveries to the countries of the Middle East fell several times, which was not fully offset by the growing demand for walnuts in the EU countries. At the same time, the average wholesale prices also decreased, which negatively affected the revenue,” says Andriy Yarmak.

However, the decrease in the export of frozen berries and fruits in February – June 2020 was less significant – $ 1.5 million or 10%. The main reason was the increased competition in the EU market from suppliers of frozen berries from North Africa, namely Egypt and Morocco. This negatively affected prices, but the overall demand for frozen berries continued to remain quite high. The decline in sales in the HoReCa segment was almost entirely offset by the growth in retail sales.

Onions took fourth place in terms of export earnings of Ukraine in the analyzed period. It is worth noting the increase in exports by 83% or $ 3.1 million. However, the base for comparison was low – last year at that time, Ukraine imported onions, and prices were high. This year, onion prices are significantly lower than last year, and in the new season, onion prices allow us to consider the prospects for its export.

EastFruit

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