In 2019 profitability in horticulture in Russia amounted to 16%, in 2020 it dropped to 7% and in 2021 it will remain on the same level unless it drops yet lower. The executive director of the Fruit and Vegetable Union, Mr. Mikhail Glushkov reported the fact in the course of the Agricultural Holdings of Russia 2021 conference, organized by the Agroinvestor. According to Mr. Glushkov, fertilizers, plant protection remedies and packaging went up in price by 52%, 30%, and 67% respectively in 2021. With that, payroll has increased by 24% in view of the lack of seasonal workers.
“Unfortunately for us, the prices on horticultural produce remain on the same level and hardly reflect inflation. Last year the demand dropped by 30% because of COVID-19, in 2021 it returned to the previous level but the prices remain on the level of 2019”, Mr. Glushkov said in the course of the conference.
He continued to observe that over half of growers' own costs are related to energy costs, which are governmentally regulated, therefore business has little to no effect on them. Within 2015-2021 gas and electricity went up in price over 28% and 37% respectively, while the inflation amounted to 33% and the average price of greenhouse produce dropped by 6% because of production expansion.
With that, the investments in the industry within the reporting period exceeded 3 billion euro. Currently, there are over 3 thousand ha of greenhouses in the Russian Federation, over 1 thousand ha of which are winter ones. According to Mr. Glushkov, the country has reached self-sufficiency in cucumber, which is currently only imported to areas neighboring China. Tomato import comprises about 30% of the overall demand. The decrease of imports is related to the state support introduced earlier that has made the industry more attractive for the investors, noted the expert. According to the evaluation of the union, the gross yield of greenhouse vegetables will increase by 1.5 million tons this year. For the comparison, last year's gross yield reached 1.4 million tons.