Friday27 December 2024
ukr-mafia.com

Cabbage prices have surged by 170%. Is this the peak, or will vegetable prices continue to climb?

"Why are vegetables so expensive? Because there’s no one to harvest them, and no one to transport them either. Additionally, there are crop failures; where there used to be good yields, there is now either war or occupation," explains Tatiana, a vendor at the Dnipro market in the capital, regarding the high prices of the vegetables she sells. Tatiana offers several varieties of potatoes priced at 35 hryvnias per kilogram, which is also the cost of carrots.
Цена на капусту выросла на 170%. Это предел или стоимость овощей продолжит расти?
Капуста дороже на 170%. Это уже край, или цена на овощи и дальше будет расти

According to EastFruit, cabbage is currently 170% more expensive than it was a year ago, carrots are up by 120%, potatoes have increased by 80%, and beets have risen by 40%. “High-quality apples are also 50% more expensive than last year, primarily due to a decrease in the percentage of quality apples produced by farmers, again influenced by the summer weather conditions,” says Alexander Khorev, coordinator of the EastFruit Weekly Ukraine project.

Official statistics indicate an overall increase in consumer prices of 11.2% this year, while vegetables supposedly rose by only 13.7%. However, the Ukrainian Club of Agrarian Business, which studies wholesale prices in two major markets—“Shuvar” and “Stolichny”—reports that potato prices have doubled over the year, from 11.5 UAH to 22.5 UAH (November prices). Carrots have tripled in price, table beets have increased by 80%, and apples by 75%.

Sometimes analysts note that potatoes have actually tripled in price. Ukrainian supermarkets are currently offering them at prices ranging from 25 to 40 UAH and even higher for premium varieties.

“The biggest issue this season was the heat. Vegetables and fruits grown in open fields were damaged due to drought, as not all agricultural companies have the means to use irrigation systems, which are insufficient today,” explains Maxim Hopka, an analyst at UCAB.

“Significant price increases in Ukraine this season should primarily be discussed in the context of the borscht vegetable set. However, there are exceptions. The areas planted with vegetables were sufficient, but the dry weather with extreme temperatures throughout July 2024 significantly reduced the yields of all crops. Many farms harvested less than half of the planned volumes,” notes Alexander Khorev from EastFruit Weekly Ukraine.

How War and Weather Affect Vegetable and Fruit Yields

Although prices for potatoes and apples dropped slightly in the first decade of December, according to EastFruit data, consumers should not expect cheap vitamins. So, what has happened?

In the pre-war year of 2021, Ukraine cultivated vegetables on 460.8 thousand hectares, yielding nearly 10 million tons. By 2023, vegetables were sown on only 396.7 thousand hectares, resulting in an 8.3 million ton harvest. Notably, Mykolaiv region significantly increased tomato cultivation (Kherson, which was the leader in tomato production before the full-scale war, is partially occupied or mined).

Agricultural expert Ivan Tomich notes that this year, the areas planted with vegetables and fruits have decreased by at least 30%, and considering the drought, yields may fall by more than 30%. “If you didn’t plant, then there’s nothing to harvest,” he says.

Due to drought issues, with abnormal heat in July and August, producers in southern Ukraine faced crop losses exceeding 30%, notes Denys Marchuk, deputy head of the All-Ukrainian Agrarian Council.

When discussing specific crops, potato yields have halved compared to last year, fluctuating between 15-25 tons per hectare instead of the usual 35-60 tons per hectare. Mechanized potato harvesting has encountered difficulties as the overly dry soil has turned into clumps that potato harvesting machines cannot process, causing them to get stuck.

The situation with cabbage is no better. Farmer Vadim Sivak, who grows cabbage in Vinnytsia region, states that last year, 1 hectare produced 50 tons of cabbage, while this year it yielded only 15 tons, nearly three times less.

This year, some farms in Ukraine—where the vegetable industry consists of 88.5% small family farms rather than large agribusinesses—harvested onions in November, although this should typically be done no later than September. A lot of cabbage and table beets remain in the fields due to a shortage of labor and equipment.

“And now there’s snow, so nothing can be done in the fields,” says agricultural expert Ivan Tomich.

Usually, when it comes to domestic crop failures, imports should fill the gap, but the issue is that prices for imported vegetables and fruits are also rising. In November, global food prices reached a 19-year high, and the FAO Food Price Index rose by 5.7% year-on-year. This is occurring at a time when Ukraine had to increase potato imports by 90% over ten months in 2024 due to a lack of its own supply. Imported goods are more expensive because they also need to be transported.

“Traditionally, we import all exotic and citrus fruits. Domestic production cannot help here—it’s not the right climate. In the late autumn, winter, and early spring months, we import over 90% of the demand for greenhouse cucumbers and tomatoes. In Ukraine, with such energy prices, due to devaluation, war (destruction, occupation, blackouts), growing greenhouse vegetables in the cooler season is unrealistic. Currently, cucumbers and tomatoes are 40% more expensive than last year, but these prices are not influenced by local production,” says Alexander Khorev, coordinator of the EastFruit Weekly Ukraine project.

Given that prices are rising specifically for the borscht vegetable set, and potatoes and vegetables for borscht are not only staples for many families but also for soldiers in the army, it’s time to acknowledge that state food purchases at present levels are also driving prices up.

For instance, in Kazatin, Vinnytsia region, volunteers from the “Mother’s Borscht” project have been preparing dry borscht for the front since June 2022, but while the cost of such a meal was around 60 UAH back then, it is now twice as high.

“Another factor contributing to rising prices is the increase in fuel costs, as well as labor costs. With the increase in the fuel excise tax, prices have gradually risen, affecting logistics. Due to a lack of qualified personnel, the cost of harvesting is increasing,” explains Maxim Hopka, an analyst at UCAB.

Agricultural expert Ivan Tomich cites several additional reasons for the price increase of vegetables and fruits: rising costs of mineral fertilizers, plant protection agents, and insufficient storage and transportation infrastructure accessible to small producers. While large agribusinesses generally have a well-developed infrastructure, this is a problem for farmers.

Labor, Electricity, Equipment, Business Partners—Problems Everywhere

“If last year my electricity bill for using irrigation systems was 40-50 thousand UAH per month, this year it’s at least 100 thousand,” says Sergey Leonov, head of the “Rovy Agro” farm in Vyshhorod district of Kyiv region. This year, Leonov primarily cultivated melons, but he also grows sea buckthorn, blackberries, sunflowers, and other crops.

“We planned to process this year: to dry and dehydrate the fruits and berries we grow. We bought dehydrators for this purpose, but with the current electricity costs, nothing is moving in this regard. We bought expensive equipment, and now it just sits idle,” says Leonov.

In November, the government also made several unpopular decisions for agrarians. The program for compensating the cost of domestic agricultural machinery was reduced by 99.8 million UAH (initially allocated 1 billion UAH), and compensation for expenses related to humanitarian demining of land was decreased by 2 billion UAH in the 2024 state budget (initially allocated 3 billion).

“Vegetable machinery—such as a combine harvester for potatoes or carrots—is very expensive equipment, mostly imported, and the state program only applies to domestic machinery, which is insufficient. In conditions where most funds are directed to the Armed Forces of Ukraine, there are no systematic support measures or subsidies,” notes Denys Marchuk from VAS.

Regarding demining, since the beginning of the year, according to the Ministry of Economy, over 309 thousand hectares of agricultural land have been surveyed under the priority land demining program. However, this is not enough; the problem of landmines remains unsolved.

“The problems have not gone away; the situation is very difficult, especially in the frontline areas: Kherson and Kharkiv regions. There is a lot of work to be done there. Overall, there are over 2 million hectares of contaminated, mined areas, so it’s crucial to continue working with international humanitarian organizations that could support demining teams through their financial programs,” says Marchuk.

The labor shortage has been reported not only at the Dnipro market in Kyiv but also at the Rovy Agro farm. “It’s currently unrealistic to replace the machinery operators who are being drafted into the army. It’s one thing to work hard on