Greenhouse vegetables in Russia may start going up in price in view of a harsh increase of the dollar-rouble exchange rate. This, combined with the possible bankruptcy of several enterprises, could have an influence on the price, mentioned the director of the National Union of Fruit and Vegetables, Mr. Mikhail Glushkov.
“There is a noticeable part of foreign currency in the cost of greenhouse vegetables produced in the Russian Federation (10% for tomatoes, 20% for cucumbers), in particular because foreign components are still purchased. If they increase in price, the wholesale prices will follow”, mentioned Mr. Glushkov. Since even an insignificant increase in wholesale prices causes a considerable change in retail ones, because of trade margins vegetables in stores will become even more expensive, added the expert.
After the long weekend, the rouble reached the level of a four-year minimum because of the oil price drop, after the leaders of OPEC had not reached an agreement on cutting oil production. The official Central Bank rate is 71.4 roubles per 1 USD and 81.02 roubles for 1 EUR, while a week ago it was 5-8 roubles lower (66.08 and 73.74 roubles accordingly).
Mr. Glushkov reminded that since 2014 with the harsh drop of the rouble rate, greenhouse produce consumption reduced to 20%, but the losses were mainly incurred by foreign companies. Now the reduction of consumption would have an impact on local producers, since several greenhouse enterprises in Russia are already in a difficult situation without proper state support.
“Vegetable consumption in the current conditions can drop to about 5% of that of the past year, as earlier the share of import was higher and now the share of local produce, for example cucumbers, comprises 90%. In the long-term perspective wholesale prices would increase, the consumers would purchase less and it would lead to a partial bankruptcy of our greenhouse complexes. It is especially true for 40 enterprises being in a tough financial situation due to the fact that they received 10% of capital investment compensation from the government instead of the expected 20%. All this can lead to an import share increase in future”, considers the head of the Union.
“In the current situation, the rate of old enterprises dropout would increase to 70-80 ha per year (compared to current 50 ha), while construction and modernization would slow down because of the currency aspect. As a result, in 2021 we would fall short for 200 thousand tons of greenhouse produce”, concluded the expert.
Source: 1prime.ru