Ukraine reduced potato production by 18% in 2024, which amounted to minus 4 million tons in terms of the entire country, First Deputy Minister of Agrarian Policy and Food Taras Vysotsky said at the Ukraine Media Center on Friday.
“We must remember that the 2024 harvest is good, but it is less than last year’s. The decisive factor behind the rise in food prices is a 10% reduction in the harvest, which is a lot. Still, certain imbalances have arisen,” he said.
As an example of such an imbalance, Vysotsky cited potatoes, whose harvest was severely affected by drought, which led to an 18% decrease in gross production, or 4 million tons.
“This is one of the factors behind the rise in potato prices. At the same time, we see that it has been at the level of 25-30 UAH/kg for three to four weeks and has not changed. We believe that it will not change further. There is no reason for potatoes to cost 50 UAH/kg,” the First Deputy Minister assured.
He explained that the current price of 25-30 UAH/kg is enough to cover the cost of growing the crop, even with a reduction in yields. This price is enough to make it profitable for supermarkets and distillers to start importing.
“We have an open market: we export the surplus and start importing products when there is a shortage. When the price of potatoes reached 25 UAH/kg, we started importing from Poland. These were small volumes compared to our production. But these several dozen tons were enough to stabilize and stop the speculative price increase,” explained Vysotsky.
He stated that the current price for potatoes is realistic. Consumers have no grounds or hopes for its reduction due to a significant reduction in production.
In addition, the Ministry of Agrarian Policy predicts a rise in potato prices by spring 2025 due to the increase in farmers’ expenses for storing the crop. The price may rise by 10-15 UAH/kg, which will be 3%. However, this allows government officials to claim that potatoes will not cost 50 UAH/kg.
Vysotsky called buckwheat and other cereals, which currently cost 25-30 UAH/kg, an alternative to potatoes.
He also noted that meat prices remain affordable in Ukraine: pork has fallen in price compared to last year, and chicken meat is in line with last season. Dairy products have risen in price due to rising prices on the global market.
“We have to realize that we have inflation in our country. It is currently at 8%, and it can reach 10%. When there is such inflation, it cannot but affect products, which have also risen in price by 10%. If we look at the forecasts, we will see that the average salary is growing. If everything continues to happen in sync, the consumer will not feel a heavy burden as a result,” summarized the First Deputy Minister of Agrarian Policy.
Continental Farmers Group agricultural holding put into operation a potato storage facility in the village of Chukva (Lviv region), designed for simultaneous storage of up to 16,000 tonnes of potatoes, investments in the project amounted to UAH 111.4 million, according to the website of the group.
“After launching a new complex in the village of Chukva, our company has the ability to simultaneously store over 100,000 tonnes of potatoes and supply them to our customers throughout almost the entire year with the preservation of quality indicators,” Continental Farmers CEO Georg v. Nolcken said.
Construction work at the facility with a total area of over 6,000 square meters was conducted during 10 months. The storage is zoned into six chambers for bulk storage of potatoes with a total capacity of 2,650 tonnes each, its shelf life is about 10 months.
Continental Farmers Group said that the floor of the potato storage is equipped with forced air systems that evenly distribute ventilation around the entire perimeter of the building, this technology is used for the first time in Ukraine.
The agricultural holding indicated among its priorities the cultivation of potatoes: chips, seed and food varieties. The total area under potatoes in the current production season amounted to 1,800 hectares, its harvest is stored in warehouses in Ternopil and Lviv regions with a total capacity of 103,000 tonnes. The group also has its own starch plant.
Agroholding Mriya and CFG, united under the name Continental Farmers Group, have been operating as a single business since November 2018.
Production of potato in Ukraine in the first half of 2021 decreased by 19.8% compared to the first half of 2020, to 240,800 tonnes, and of vegetables – by 4.8%, to 684,700 tonnes, according to the website of the State Statistics Service.
The State Statistics Service said that as of July 1, potatoes were harvested from a total area of 17,900 hectares, which is 22.2% less than on July 1, 2020. The average potato yield increased by 9.7%, to 141.8 centners per hectare. The leaders in potato production were Kherson region, which harvested 79,800 tonnes (less by 36.1% compared to January-June 2020), Zhytomyr region – 46,500 tonnes (less by 0.8%) and Vinnytsia region – 39,800 tonnes (less by 2.9%).
In addition, it is reported that the total production of vegetables in Ukraine in the first half of 2021 decreased by 4.8% compared to the first half of 2020, to 684,700 tonnes. At the same time, production of open field vegetables remained at the level of January-June 2020 – 386,900 tonnes.
The yield of open field vegetables in the first half of the year increased by 4.6%, to 183.6 centners per hectare. As of July 1, 2021, crop data were collected from 21,900 hectares, which is 1.4 less than on July 1, 2020. The leaders in the cultivation of open field vegetables during this period were Kherson region, which harvested 234,500 tonnes of this crop (an increase of 2.3 times compared to January-June 2020), Lviv region – 312,400 tonnes (more by 24.8%) and Dnipropetrovsk region – 19,500 tonnes (more by 58.9%).
According to the State Statistics Service, the production of fruit and berries in January-June 2021 decreased by 7.2% compared to January-June 2020, to 182,100 tonnes. The leaders in their cultivation were Dnipropetrovsk region, which harvested 21,400 tonnes of fruit and berries (less by 6.1% versus January-June 2020), Donetsk region – 21,100 tonnes (more by 54.3%) and Zaporizhia region – 17,500 tonnes (more by 86.8%).
Potato producer Central Plains Group Ukraine (CPG) intends to build a waste-free potato processing plant in Hlyniany (Lviv region) with a capacity of 40,000-50,000 tonnes per year.
This is stated in a posting on the website of the Lviv Regional State Administration.
“We grow potatoes and cooperate with the Frito-Lay company, which produces chips. Now every sixth pack of chips of this company is made from our potatoes, and in general, this is every tenth pack in Ukraine. Ambitious plans are that every fourth pack in Ukraine was from our potatoes,” member of the Board of Directors and a representative of the Finnish Investment Fund Oleh Drin said.
According to the administration, investors from CPG Ukraine and Governor Maksym Kozytsky discussed the working aspects of the project, in particular the permits for the construction of a potato processing plant. CPG also discussed the possibility of repairing the Zastavne-Hlyniany road in 2021 with the regional administration.
The administration said that the company, founded by a group of farmers from the U.K. and Finland, plans to invest about $7 million in a project for waste-free processing of potatoes (including starch) and create about 50 jobs.
“For the profitable operation of the plant there is a great need for raw materials. We plan to establish cooperation with local farmers and build an effective process for growing and supplying raw materials to the plant. We plan to cooperate with USAID on the development of farming and in the future to establish a process for purchasing potatoes from farmers,” Drin said.
According to the administration, CPG in 2020 grew 15,000 tonnes of potatoes in Kamianka-Buzka and Sambir districts of Lviv region on a total area of 700 hectares.
Last year, the company put into operation the first stage of potato storage facility with a capacity of 11,000 tonnes with refrigeration equipment. This year, CPG plans to build a second stage of the potato storage facility with a similar capacity.
Ukraine today has potato storage capacities of 300,000 tonnes with the minimum necessary level to meet the domestic needs being 1.5 million tonnes, Director of the Ukrainian Association of Potato Producers Oksana Ruzhenkova has said.
“Today, Ukraine has 300,000 tonnes of potato storage facilities. Over the past five years, 350,000 tonnes of storage facilities have lost their usability. The domestic demand is at least 1.5 million tonnes,” she said at a press conference at Interfax-Ukraine.
According to Ruzhenkova, this year the state plans to allocate UAH 400 million from the budget for the development of horticulture, and under this program, potato producers see the potential for using funds to compensate for the construction of storage facilities.
“If about UAH 200 million is left for our needs [out of the total amount of funds under the gardening program], we will be happy. We will build potato storages for 100,000 tonnes and Ukraine will be able to at least slightly reduce the deficit. Some 100,000 tonnes of storages from scratch need about EUR23 million and we can build it based on surveys of the association,” she said.
She noted that until 2014 domestic potato consumption in Ukraine was estimated at 7 million tonnes, now it is about 4.5 million tonnes with production standing at 20 million tonnes. Some 95% of potatoes are grown in home gardens. The processing capacity in Ukraine is only about 250,000 tonnes of potatoes. Ukraine exports small volumes mainly to Moldova, imports about 270,000 tonnes from the Russian Federation and Belarus.
Imports of vegetables to Ukraine have significantly exceeded the figure of the previous record, which had been held for nine years, and in the 2018/2019 season (August-July) exceeded the previous record immediately by 27% and reached 264,100 tonnes.
According to the EastFruit information and analytical platform, in the 2009/2010 season, the import of vegetables to the country over the season exceeded 200,000 tonnes for the first time and amounted to 208,500 tonnes. Since then, the volume of imports of vegetables has not even approached the mark of 200,000 tonnes, but last season it exceeded the previous record by 27% at once.
“In 2018/2019, import volumes exceeded the previous season’s figure in natural terms by more than two times. Over the past two seasons, import volumes have more than tripled. In value terms, growth rates were slightly lower due to an increase in the volume of traditional inexpensive vegetables and potato in the import structure. In general, foreign suppliers of vegetables and potato earned $155 million in Ukraine over the season,” EastFruit noted.
According to the platform, the main items of vegetable imports to Ukraine in terms of value were tomatoes, onion, pepper, and cucumbers. In fact, Ukraine increased its imports of almost all positions of vegetables and potato, including salad crops and greens.
