EastFruit analysts have conducted a unique study of the retail trade of fruits and vegetables in Ukraine that allowed to digitize all the main sales channels for fresh fruits, berries and vegetables for the first time.

“While working on the study, we encountered a number of surprises that shed light on many seemingly illogical decisions of supermarket chains in this area. We also identified the top 20 vegetables and fruits sold in supermarket chains, determined the volume of the sales and their proceeds, and even made a rating of Ukrainian supermarket chains in terms of vegetable and fruit sales. Our analysts also used statistical indicators to estimate the revenues of the cash market in horticultural business in Ukraine and key reasons for this phenomenon for the first time” says Andriy Yarmak, economist at the Investment Centre of the Food and Agriculture Organization of the United Nations (FAO).

“This will be of interest to all supermarket chains, as it will help them understand their strengths and weaknesses in the market. After all, it is the produce department that is the key to the successful food retail business in modern realities. In addition, based on the study, we discovered new opportunities for growers (vegetable, potato, berry growers, etc.) to develop production and sell at higher prices. Naturally, it will be useful to importers and traders of vegetables and fruits, too. We will also tell them about the tools to select partners among supermarket chains right in order to reduce the potential risks of non-payment for the goods delivered” the FAO expert explains.

Leading experts of Ukrainian retail and horticultural business will also share forecasts for the development of the fruit and vegetable trade in such sales channels as online sales, cooperation with the HoReCa segment and processing.

The research results will be presented at the international conference “Retail Forum-2021” on December 2, 2021 in Kyiv within the framework of #FTradeClub. You can register for the conference here. The event is supported by the Ukrainian Horticultural Association, the European Bank for Reconstruction and Development (EBRD) and FAO.

After the Retail Forum, a Trade Forum will take place, where the main national and regional supermarket chains in Ukraine will have direct B2B negotiations with growers and traders on the supply of fruits and vegetables.

Сообщение Fresh produce trade in supermarkets of Ukraine: revenues, trends, structure and forecasts появились сначала на EastFruit.

After being unable to sell all the potatoes produced in 2020/21, many Georgian potato producers may face yet another disappointing season in 2021/22. Sounds strange as one would think that farmers usually decrease the cultivated area after a bad year but that’s where our analysis gets interesting and could only happen to potato producers.

Since October 2020 most Georgian potato producers have been selling their potatoes at 0.50-0.60 GEL (0.15-0.18$) per kg. Moreover, prices have hit the lowest levels in in March/April 2021 when they usually rise due to low stocks.

As producers were suffering due to very low prices, some of them chose to plant their own potato stock rather than sell them hoping that next year the prices will recover. Thus, assuming weather allows September’s potato harvest in Georgian might be a high one again.

Meantime, the situation in Turkey seems to be similar with significant surplus of potatoes on the market, which could provide even more pressure for the Georgian potato market. Despite all of these factors, Georgia still imported a significant amount of seed potatoes from the EU. Georgian potato producers seem to think that better quality of potatoes will be the point of difference when market is oversupplied and could help them get a decent price.

Source: EastFruit survey

Average farmgate price for Georgian potato in January 2021 was about 28% lower than in 2019 & 2020 and the difference increased to 60% in April. Price difference would have been less drastic if not for the sharp price hike in March 2020 when Covid pandemic uncertainty and lockdowns caused panic buying in Georgia and worldwide.

Data sources: Geostat.ge; Ministry of finance of Georgia.
*production from seeds imported in particular year – estimated by EF
**preliminary data

The main driver for the later drop in prices is a relatively good harvest coupled with weak local demand due to pandemic’s impact on the drop in tourism and HoReCa. As stocks started to pile up, some farmers even requested support from local governmental bodies and threatened to dump their potatos. Overall, farmers found two main ways out of the situation: exporting or using them as seed potatoes. Second option seemed easier, if you still had cash.

Primary export destination for Georgian fresh potatoes is usually Azerbaijan. As a rule, Azerbaijani traders come to Georgia with trucks, buy potatoes and return home. Given there was not much demand from Azerbaijan in the first half of 2021, Georgians found it hard to export – mainly due to lack of experience, underdeveloped post-harvest infrastructure, logistics and marketing.

Many of the unsold table potatoes were planted back into the ground in spring in hopes of better economic prospects for the next harvest. Georgia’s neighbour, Turkey is seeing that early potato harvest is starting good. Weather and soil conditions in the country are said to be favourable, yet there is some caution: potato consumption in touristic regions of Turkey is usually very high, and now Covid pandemic is threatening Turkey’s tourism sector. With fewer international visitors, translated into lower consumption and higher stocks compared to pre-pandemic levels, Turkey will try to aggressively export its potatoes. Part of it may be shipped to neighboring Georgia.

Much fewer of the Georgian potato farmers found another way to compete – focusing on higher quality.

Source: Ministry of Finance of Georgia
*all data for 2021 include first four months only

In the first four months of 2021 Georgia’s import volumes of seed potatoes (1072 tons) were second highest in the last five years – more than imported quantities in 2017 and 2018 altogether. This is even more impressive when we observe a very steep increase in seed potato prices in the local currency. Prices for imported seed potatoes in Jan-Apr 2021 were 46% higher compared to the average price of 2014-2020 (in Georgian lari).

Significant imports of seed potatoes when prices for seed potatoes are high, is not accidental: Georgian market values high quality locally grown potatoes.

Sources: Ministry of Finance (Turkish imports), EastFruit survey

Through January-April 2021, Georgian farmers, who mainly used imported European seed potatoes and focused on getting higher quality product, got on average 27% more than an average Georgian farmer. More impressively, Georgian market seemed to be ready to pay twice as much for such potatoes compared to what it was ready to pay for the Turkish potatoes.

Of course, the price received by farmers with high quality potatoes have also dropped compared to the past year, but they experienced no problems selling their produce. Moreover, high quality product was sold at a much higher pace and farmers did not have to use the potato stock as seed potatoes at the end of the season, like many others.

To summarize, the Georgia’s potato harvest in 2021/22 may end up being very high one  again. Despite such concerns, farmers hope for improved economic situation, economic revival from pandemic and higher demand. Hopefully, these expectations will come true, but if tourism sector does not grow quickly in the region, there will be a fierce competition with potato imports from Turkey again.

While this season was not easy for Georgian potato producers due to low prices and low demand, farmers who focused on quality ended up in much better situation. It may be the right time for Georgian potato growers to draw more attention to potato quality. We estimate that usually only less than 10% of Georgia’s total annual production comes from newly imported high quality seed potatoes, so the high quality segment of the potato market is likely to have a large margin for growth.

Сообщение Potato prices in Georgia may remain at a record low levels in 2021/22 – EastFruit появились сначала на EastFruit.

The season of local asparagus is gradually gaining momentum in Ukraine and prices are still holding at relatively high levels, EastFruit reports . The current season of asparagus in  Ukraine started about two weeks later than last year , and prices for the first small wholesale batches were on average 15% higher.

At the moment, the supply of local asparagus on the Ukrainian market is still limited, and good quality products are offered at a rather high price. So, large producers who have contracts for the supply of asparagus to supermarket chains still manage to sell their products from UAH 200 / kg ($ 7.20 / kg), while on the supermarket shelves the retail price could reach up to UAH 500 / kg. ($ 18 / kg).

It is noteworthy that only a few large producers who have established contacts with retail chains can count on such price levels. In the meantime, the situation looks less rosy for small farmers. Thus, the active growth in the popularity of asparagus in Ukraine in the past few years has naturally led to an increase in the cultivated area with many small producers involved.

As a result, in the wholesale markets of the southern regions, where asparagus mature earlier, there are already offers of small wholesale lots of asparagus at prices around UAH 100 / kg, and the producers themselves receive an even lower price. In this case, we are talking about a low-quality product with frost damage or non-standard appearance and without packaging.

Regarding the expectation for the season, large producers will start the main supply of asparagus to supermarket chains and HoReCa enterprises only from next week. After an increase in supply, prices will naturally decrease, but it is still difficult to predict their exact level during the high season. On the one hand, the production of asparagus is definitely growing in Ukraine, and its supply is increasing significantly every year, putting pressure on prices in the market. On the other hand, the demand for asparagus in the current season will be higher thanks to the revitalization of HoReCa enterprises after the weakening of quarantine norms in the country. In addition, the range of prices in the market will continue to be very wide, as large producers working with supermarket chains will manage to keep the prices higher than small farmers.

Сообщение The prices for asparagus are still high in Ukraine but might collapse soon появились сначала на EastFruit.

The start of the season of asparagus, as of other vegetables, will shift in Ukraine due to the cold spring this year, EastFruit reports and indicates what to expect on the market in the coming weeks.

“The asparagus season in 2020 in Ukraine began in mid-April, but in 2021 the first relatively large batches of it will be available on the Ukrainian market only by the beginning of May,” comments Tetiana Ivchenko, researcher at the Institute of Vegetable and Melon Growing of the NAAS and an expert of the asparagus market.

According to EastFruit, there are now only small wholesale and retail lots of asparagus from small producers on the Ukrainian market. In this case, the prices for asparagus fluctuate within 200-300 UAH/kg ($ 7-11/kg), and it is still mainly distributed directly to consumers. The main sales season in supermarket chains and HoReCa enterprises will begin in just a few days.

“There is already a significant increase in demand for asparagus from restaurants and wholesalers, who got used to offering it to consumers at this time of the year. It confirms the fact that asparagus has already gained quite high popularity among Ukrainian buyers, and producers will have active demand in the current season,” Tetiana Ivchenko adds.

Problems for Ukrainian farmers could have been caused by a wave of frosts in almost all regions of the country last week. However, the freeze primarily hit small producers and those who were unable to use protective technologies. “Asparagus producers should know that in April-May almost every year there is a high probability of frost in Ukraine, so they need to be fully prepared for it and try to mitigate the consequences,” Tetiana Ivchenko continues.

Thus, cold spring and the recent wave of frosts have significantly shifted the start of the season in Ukraine, but such a delay at the start promises stable supplies of fresh produce until the end of June. “Otherwise, the outlook for the season is positive, as we can expect an increase in the supply of this healthy vegetable on the market this year. Moreover, the shift in the season may even be positive, because it will coincide with the reopen of the restaurant after the last Covid 19 wave and even now the demand for the future harvest from HoReCa promises to be quite high,” Tetiana Ivchenko sums up.

Сообщение Asparagus season is delayed in Ukraine, but it is likely to be successful появились сначала на EastFruit.

According to representatives of the Pomușoarele Moldovei Association of Berry Producers, against the backdrop of a worsening epidemic situation in the country and the associated reduction in working hours, as well as stricter control over the activities of urban fruit and vegetable markets, their visitors’ traffic is reduced. The resumption of work (in a limited format) of HoReCa facilities did not lead to an expected increase in sales of berries. Probably, in this case, the declining incomes of the population and the caution of buyers, frightened by negative news, are also of high importance. In this situation, individual farmers who managed to acquire a stable customer base in social networks during the lockdown, or who used the services of home delivery services, decided to resume this sales practice.

According to the chairman of the association, Annette Ganenko, a relatively small but rather active group of farmers appeared in the spring and early summer, selling up to several hundred kilograms of berries daily in a pre-order format through the Internet. Prices for products in this trading format are slightly higher and more stable than in the wholesale and retail markets. After the opening of markets, online sales declined slightly, but now they are likely to begin to recover.

Moreover, as the very hot weather returns to Moldova, a certain category of consumers, including those who appreciate the convenience of home delivery services for berries upon pre-order, will continue to use it more actively.

Сообщение Due to the worsened situation with COVID-19 in Moldova, berry producers are returning to online trading появились сначала на EastFruit.