Ukraine's potato harvest drops 18% due to poor weather; inflation spikes

Poor weather conditions for potato cultivation in Ukraine this year have led to an 18% drop in the harvest, causing a sharp jump in prices, higher imports and accelerated inflation, officials and analysts say.

Often dubbed 'second bread', potatoes are a staple of the Ukrainian diet, with average consumption at about 130 kg per person a year, well above average bread consumption of up to 20 kg a year.

The agriculture ministry forecasts that this year's potato harvest could fall to 17.5 million metric tons versus 21.3 million in 2023.

"This is the result of bad weather conditions, as the sown area remained unchanged at 1.2 million hectares," Taras Vysotskiy, the first deputy minister, told Reuters.

Analysts say the drop in yields was due to frost during spring sowing, followed by significant rainfall, then record heat and drought.

Vysotskiy said the domestic market volume, estimated at about 2.5 million tons of potatoes annually before the war, had dropped to 1.5 million tons due to a shrinking population.

The population consumes about 4 million tons of potatoes, while about 3 million tons are used for sowing, up to 6 million tons are used for animal feed, and a significant portion spoils during storage.

Vysotskiy said up to half of the crop harvested by non-professional growers on household plots was spoilt.

PRICES JUMP

The drop in the harvest has driven up retail prices, which have jumped to 25,000 hryvnias ($605) per ton from 15,000 hryvnias a year earlier.

Analysts at specialist portal EastFruit said potatoes were selling for around 22,000 hryvnias per ton as of Oct. 18.

"Potatoes continue to be in the highest demand," EastFruit said. "Last week, every third advert for the purchase of horticultural products was devoted to potatoes." Vysotskiy says there is no reason for potato prices to rise further in the country, as imports from Poland and the Baltics have started to balance the market.

"They say that there will be a price of 50-55 hryvnias per kg, (but) we do not believe in it and do not see the grounds for it," he said.

"There are already imports - not yet in the millions or hundreds of thousands of tonnes, but several tens of thousands of tonnes have already arrived."

The official believes that the potato price will stabilise until February, and will depend after that on a stable supply of energy for storage facilities.

The spike in potato prices has already affected year-on-year inflation in September, which rose by 8.6%, with vegetables rising by a record 56.4%.