It has been a long time since the autumn in Ukraine was so generous. The rich harvest of potatoes and nearly all the vegetables and fruit make it possible to slightly ease the pressure of the so-called governmental “reforms” on the Ukrainians’ life. The large offer of fruit and vegetables on the Ukrainian market resulted in price fall over the last four months. The experts predict stable prices at for fruit and vegetables up to the end of the year. Of course, it does not make producers happy, however, they hope for a price rise in winter when vegetables and fruit will quickly rot because of the lack of modern stores in the country.
To the pleasure of poor people, in September prices for all the vegetables needed for borsch were steadily decreasing. The autumn turned into a real potato paradise in Ukraine. According to the information from the Ministry of Agrarian Industry, this year they collected over 20 million tons of potatoes and this amount significantly exceeds the needs of the domestic market. It is no coincidence that the wholesales price for potatoes is less than a hryvnia per kilo and consumer price is not higher than two hryvnias.
“It is a seasonal phenomenon caused by the harvest: when the harvest is good prices fall down. However, in mid-October prices for vegetables and fruit will start growing, at least up to the level of the same period of the last year,” Volodymyr Lapa, Director General of the Ukrainian Agrarian Business Club told The Day.
It should be noted that the rich crop of the Ukrainian fruit has nearly made foreign products disappear from the market. It appears that Ukraine is able to survive without Polish apples, Turkish grapes and Spanish peaches … but only by winter. In winter imported fruit are more in demand than the Ukrainian ones that are not properly kept and go under.
“The Ukrainians grow much more fruit than they need and could have met the demand for cheaper fruit if there had been opportunities for storing them. Imported fruit are selected and packed for the long-term storage that is why they are one up in Ukraine in winter. Importers do not feel any competition in Ukraine,” Lapa explains.
However, buckwheat broke an absolute record in September: its price fall in average from 18.71 to 18.65 hryvnias per kilo. It is logical since when the crop is good the speculators have nothing to do. So, we are celebrating the end of the ten-month buckwheat crisis shameful for the government.
In general, the market food prices dynamics is food for thought. Why the record-breaking corn crop did not result in price fall for bakery products in September? Why is the price for milk in the supermarkets just crazy whereas in the markets milk did not go up in September despite the seasonal factor? Some of the experts consider this to be speculations and some of them are sure that the markets will soon catch up with the supermarkets.
“Markets and distribution networks are different retail structures. The supermarkets have a certain bureaucratic chain and in the market the owners set prices themselves and instantly react to the change of the demand,” Oleksandr Yaroslavsky, Assistant Director General of the Ukrainian Agrarian Confederation commented the situation to The Day.
Unlike fruit and vegetables, the prices for all the meat and dairy pro-ducts went up in September. During the press conferences the Agrarian Minister Mykola Prysiazhniuk assured that Ukraine completely supplies the domestic demand for milk and can even dream about its exportation. However, if there was enough milk on the Ukrainian market its price would not rise. If in September the price for certain kinds of hard cheese went up to 300 hryvnias per kilo how can one talk about the sufficient amount of milk on the market? The same goes for chicken eggs than prices: the minister declares that the country produces 15 percent more eggs than it needs, however, the eggs went up by a third in September.
“In principle, it is a seasonal price rise for the dairy products considering the annual tendency for cattle reduction. One of the factors that influence the price rise is that the Ukrainian farmers annually produce by five to six percent less milk than in the pervious year,” Yaroslavsky explains. According to the expert, the price rise for dairy products will have certain consequences for the market and consumers. First of all, the price rise for milk will result in the price rise for the dairy products that will lead to the smaller amount consumed.
“The amount of the dairy products consumed in Ukraine is very small. The average recommended dairy products consumption rate in milk equivalent is 380 kilograms per person per year but today this rate is only 205 kilograms. Many customers might start buying dairy products in the markets and not in the distribution chains. However, if the prices in supermarkets rise the same will soon happen in the markets,” Yaroslavsky explains.
The jump in prices might make milk factories switch to the dairy products containing less butterfat in order to assure the sustainable production. “It means that similar dairy products will differ more than now. For example, expensive cheese will be sold along with cheaper cheese product, sour cream – along with cheaper sour cream product. Producers have no other choice but cheapen the cost price replacing expensive butterfat by cheaper vegetable fat,” the expert predicts. According to him, the rise of domestic price for dairy products will encourage the import volume increase.
Lapa also considers cattle population reduction to be one of the factors of dairy products price rise. “Cattle population reduction leads to the dairy products deficit. The price for milk is growing and, according to some forecasts, in winter they will be higher that in the same period last year,” the expert says.
The prices for meat products are also rapidly growing. In September boiled sausage and summer sausage in average went up by 12 and 16 percent respectively. If “Doktorska” sausage costs 70 hryvnias per kilo and summer sausage costs 167 hryvnias, it is clear why the Ukrainians become staunch vegetarians.
“It is difficult to say why the sausage price went up. There is a wide choice of it in Ukraine – everything depends on the ingredients it is made of. I can tell that in Ukraine there is a significant lack of beef. In 2003-10 its production decreased by 60 percent in Ukraine,” Yaroslavsky describes the situation with meat.
Except for beef, poultry is also getting more expensive. “It is actively exported and the export volume growth rates exceed the production volume growth rates; thus there is a deficit that favors poultry price rise,” the expert explains. However, according to the forecasts the price for pork will remain stable.
“Of course, people will buy less dairy and milk products. The poorest categories of people, for example, retirees will refuse to eat meat products. Some will buy less than previously. Of course, potatoes and bread will be consumed the most. Obviously, the pattern of consumption will worsen,” Lapa sums up.
