For a sustained reduction in prices, it is crucial to construct vegetable storage facilities and reduce the number of intermediaries in the market. Writes OBOZ.UA. This information is reported by Kontakty.UA.
This was discussed in a TV broadcast by Dmitro Solonchuk, a member of the Verkhovna Rada Committee on Agricultural and Land Policy. The expert pointed out that a significant price increase was observed before the holidays due to the impact of the dollar exchange rate, as well as rising costs for producers regarding energy resources, transportation, and equipment purchased in foreign currency.
Reasons for the price increase of products
- fluctuations in the dollar exchange rate – many producers depend on imported equipment, fuel, and energy resources, which directly affects production costs;
- increased demand before the holidays – traditionally, demand for products rises significantly before New Year and Christmas, contributing to temporary price hikes;
- lack of adequate storage infrastructure for vegetables – the shortage of vegetable storage facilities forces farmers to sell their products immediately after harvest, which drives prices up due to the involvement of intermediaries.
According to Solonchuk, the situation is complicated by the fact that many regions of Ukraine still lack sufficient vegetable storage facilities. This leads to an uneven distribution of profits between producers and intermediaries, who dictate market prices.
One of the key reasons for price instability in vegetables is the lack of storage places for products. According to Solonchuk's calculations, Ukraine needed at least 130-140 vegetable storage facilities for the 2022-2023 period, but only about 20 facilities have been built.
"For instance, farmers grow potatoes but are forced to sell them for 8-10 UAH per kilogram because they lack places for long-term storage. Then, through numerous intermediaries, the price for consumers rises to 30-35 UAH per kilogram," the expert explains. This results in significant markups and an unfair distribution of profits: the producer receives a minimum, while the main profits remain in the hands of resellers.
Dmitro Solonchuk emphasized the importance of developing and adopting a new law on domestic trade, which will help eliminate the excessive number of intermediaries in the market. This bill is planned to be discussed as early as 2025. "The law will reduce the number of resellers and ensure direct access for farmers to the shelves of supermarkets. This will guarantee a fair price for both producers and end consumers," he noted.
The expert also stressed that each region should have at least 5-6 vegetable storage facilities, which will allow for year-round product storage and prevent market speculation. This will ensure affordable prices for Ukrainians regardless of the season. According to Solonchuk, a decrease in prices for the following groups of goods is expected soon:
- eggs – a significant decrease is possible due to market stabilization after the holidays;
- dairy products – it is forecasted that further price increases will halt and stable price indicators will be established.
As reported by OBOZ.UA earlier, in December, international prices for butter ended a continuous rise that had lasted for the past 14 months. This occurred due to restrained global demand and stock accumulation.