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Why have vegetables and fruits become cheaper in Ukraine?

A few days before the New Year, EastFruit specialists analyzed in detail the outgoing year of 2020 highlighting the main distinctive features of the “New Year’s tables” in the current and previous seasons. The good news is that prices have mostly decreased and the choice has become much wider.

Ukraine ended last year in a completely different reality, but no one could have known a global pandemic was coming. The rapid spread of COVID-19, as well as the often chaotic and unpredictable actions of the Ukrainian authorities in these conditions, had a direct impact on the fruit and vegetable sector of Ukraine. How did it affect the prices of vegetables and fruits on the eve of the New Year holidays? Let’s analyze wholesale prices, which, as a rule, change more significantly than retail prices.

We will start with the main fruit in Ukraine – the apple.

Despite farmers’ statements that the 2020 apple harvest in Ukraine will be 15% or even 30% lower than in 2019, the estimates of independent experts refute these claims, in particular, the analysts of APK-Inform: Vegetables and Fruits. It is already obvious that the gross apple harvest in Ukraine for 2020 exceeded the indicators of 2019 by 5-7%. Experts stated that weather disasters if they did not completely destroy the apple harvest in 2020, did such damage that the share of sub-standard and/or second-grade products exceeded the previous indicators by at least 30%. To the disappointment of Ukrainian farmers, supermarkets were no longer lining up in front of them for an apple of any quality as it was a year ago.

As a result, Ukrainian farmers still have enough apples of the second grade and sales are carried out at prices starting from 7 UAH/kg ($0.25/kg). In 2019, it was impossible to buy an apple for less than 10 UAH/kg. High-quality apples are currently on sale, as in 2019, at 16 UAH/kg ($0.57/kg), but the volume of quality products this year is much lower than at the end of last year. It is precisely the insufficient supply of high-quality apples that will most likely prevent Ukrainian producers from increasing the volume of apple exports this season.

Read also: Pre-holiday prices in Moldova for citrus fruits rose 14%, salad vegetables fell 11%

Thus, an apple is on average sold in UAH 10-15% cheaper. If we take into account that the hryvnia exchange rate against the US dollar fell by about 17% over the year, then the real incomes of Ukrainian apple producers fell by almost a third.

Mandarins are the number 1 fruit on the New Year’s table of Ukrainians. According to experts, no problems with the harvest of this fruit have been recorded in the main producing countries this season. International trade for New Year’s Eve was carried out without any particular difficulties and the wholesale prices for mandarins are only marginally higher than last year’s figures. A wide price range of 26-40 UAH/kg for these citrus fruits are explained by the different quality parameters, variety types, and country of production. A special increase in the cost of mandarins among Ukrainian consumers is not expected despite the depreciation of the national currency.

The range of wholesale prices for lemons, which are currently on sale at prices ranging at 28-55 UAH/kg, has also significantly expanded at the end of 2020. In this case, EastFruit experts explain the colossal difference in prices precisely by the different quality indicators of lemons that are present on the Ukrainian fruit and vegetable market. In comparison to the same dates in 2019, the range of wholesale prices for lemons in Ukraine was significantly narrower amounting to 30-40 UAH/kg. Hence, there is no significant change in the price of lemons this year.

Bananas selling prices also expanded towards the end of 2020. As of the last week of December 2020, wholesale prices for bananas in Ukraine range from 20-29 UAH/kg. At this same time last year, bananas sold at 24-26 UAH/kg and there was already a choice of bananas. Now, bananas from different countries are available and the competition among banana importers has intensified. Therefore, bananas can now be bought even cheaper than in 2019. This means that given the 17% devaluation, banana importers sell them on average 20% cheaper since banana supplies are calculated in US dollars.

Potatoes are undoubtedly one of the main products for Ukrainians. However, this last season came as a shock for all participants in the potato market due to the huge import volumes, even from Russia, which we have written about previously. We also explained why the situation has not dramatically improved so far and that potato imports will continue.

Nevertheless, potato production in 2020 still increased both at household and professional farms. The result was a decrease in prices for potatoes but only by 15% in relation to the previous year. Wholesale prices for potatoes in Ukraine are now 2.5 times higher than in Poland and even higher than in neighbouring Moldova, a country that previously imported potatoes from Ukraine. Not surprisingly, Ukraine continues to actively import potatoes from the EU while local producers are holding back sales in hopes for a rise in prices in the second half of the season.

Onions and cabbage are two crops of the borscht set that disappointed farmers the most this season in terms of wholesale prices, but undoubtedly delight consumers. Despite the fact that in the previous season the lack of supply led to the establishment of very high prices for these products and in the onion segment high prices were held for 2 seasons in a row, producers continued to increase the area under both onions and cabbage. In addition, fairly good weather conditions have led to an increase in the yield of these crops and since the beginning of the current 2020/21 season it has become obvious that the supply of onions and cabbage significantly exceeds the demand.

White cabbage prices in Ukraine are currently 20% lower than a year ago and the situation with onions is even more serious since producers sell wholesale lots of these products almost twice as cheap as at the end of December 2019. Therefore, Ukraine remains the country with the lowest prices for onions in the world, but onion exports are not possible because Ukrainian producers do not have the quality and ability for export.

Beets and carrots are the only segments where the price tags of the past and current seasons practically coincide. The average price of root crops is near 3 UAH/kg. However, this is still a very low price, which is disappointing for farmers. Also, EastFruit analysts do not predict stability in these markets in the second half of this season because, in their opinion, problems with stocks in the storage of high-quality carrots and beets especially may begin in March 2021!

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