As EastFruit analysts have already reported, despite the active harvesting of potatoes in Ukraine, a good harvest and record low prices in neighboring countries, prices in Ukraine not only do not decrease, but also have a slight upward trend.
The main reason for such price dynamics is consumer psychology and artificial excitement, fueled by many media. This, by the way, can really lead to a shortage of potatoes, because a significant part of the products will simply deteriorate in the storerooms and on the balconies of consumers who do not have the necessary conditions for long-term storage of such large batches of products.
How will the situation on the potato market affect the prices of “borsch set” vegetables: onions, cabbage, beets and cabbage, as well as different types of cereals, especially buckwheat?
If you look at the prices of vegetables now, against the background of the expected harvests, you can say that the situation on the potato market has already affected the prices of borsch vegetables.
Despite the significant expansion of onion areas in Ukraine and a relatively good harvest, its prices are now 11% higher than a year earlier at the same time. For other vegetables, the situation is close - prices are either the same, or slightly lower or higher, and this is against the background of the expected increase in production.
That is, we can conclude that potatoes are now supporting the entire “borsch set”. After all, buyers who buy potatoes in bulk for future use in the markets often agree to sellers' offers to buy onions, carrots and beets as well. Moreover, the rest of the goods in this group are much cheaper than potatoes, and seem much more affordable.
However, potatoes as a consumer product can be replaced in the diet with cereals or pasta, since it is used mainly as a side dish for main dishes. Of course, it cannot be completely replaced, but a significant part of consumption can be replaced.
If we evaluate the situation with prices for cereals, then wholesale prices for most of the cereals at the moment are approximately two times lower than for potatoes. That is, it is now more profitable for consumers to buy barley, pearl barley and wheat cereals, which can be purchased in bulk at 5-6 UAH / kg (20-24 US cents per kg), while wholesale prices for potatoes reach 8-11 UAH / kg (32-45 US cents per kg).
But buckwheat is significantly inferior to potatoes - its prices are on average 2,0-2,5 times higher. Moreover, market participants say that this year the buckwheat crop was low, so the price of buckwheat will only increase, since Ukraine’s own production may not be enough. However, now the wholesale price of buckwheat is at a level of about 20 UAH / kg (81 US cents per kg).
If prices for potatoes are kept at a high level further, they will support prices for cereals and vegetables of the borsch set. However, a repetition of the scenario of the development of events, similar to the one that was onion a season earlier, should not be expected. Already, on the trading floors there are a huge number of proposals for the supply of cheap Russian potatoes with Belarusian documents to the Ukrainian market, of course, through Belarus.
In this situation, vegetable growers and potato growers win, of course, if they wisely approach the sale of potatoes, as well as intermediaries from Belarus. Loses, as often happens, the Ukrainian consumer.
A source: Eastfruit