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Effective Post Harvest Technologies in Ukraine John Millns Lviv, Friday 8 th October 2010 Slides Courtesy of the International Finance Corporation (IFC), Part of the World Bank Group. Ukraine Fresh Fruit and Vegetable Market. Large market for fresh fruit and vegetables - PowerPoint PPT Presentation
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EU-funded Project “Implementation of Ukraine’s Commitments under WTO and ENP Frameworks in the Rural Sector (Sector-Wide Approach)”
Effective Post Harvest Technologies in Ukraine
John MillnsLviv, Friday 8th October 2010
Slides Courtesy of the International Finance Corporation (IFC), Part of the World Bank Group
EU-funded Project “Implementation of Ukraine’s Commitments under WTO and ENP Frameworks in the Rural Sector (Sector-Wide Approach)”
Large market for fresh fruit and vegetables > 5,5 million tons (2-2,5 billion USD)
Strong retail growth during the last 5 years andretailers unable to keep up with growing demand
30% of vegetables and 70% of fruit sold by retailers are currently imported
Opportunities to increase local production are significant, yet unrealized
Post harvest barriers to increase local production include:• Ineffective supply chains• Investment needed in storage and infrastructure• Huge losses ( 5 million tons per year) as result of poor quality storage and transport
Ukraine Fresh Fruit and Vegetable Market
EU-funded Project “Implementation of Ukraine’s Commitments under WTO and ENP Frameworks in the Rural Sector (Sector-Wide Approach)”
Key Market Channels for Fresh Produce
Small stores3%
HoReCa21%
Bazars*59%
Supermarkets17%
IFC estimates for2010 - Share of key channels for sale of fresh produce, % (*markets include summer street stands).
EU-funded Project “Implementation of Ukraine’s Commitments under WTO and ENP Frameworks in the Rural Sector (Sector-Wide Approach)”
Losses in the Supply Chain
Ukraine Holland
Farm level 30 - 35 % 15 – 20 %
Sales point 10 % 5 %
Consumer 25 – 30 % 10 – 15 %
Total losses ~ 65 % ~ 35 %
EU-funded Project “Implementation of Ukraine’s Commitments under WTO and ENP Frameworks in the Rural Sector (Sector-Wide Approach)”
Ukraine FFV Cool Chain Review (December 2009)
Main findings:
Large losses
Only 10% of storage facilities meet with modern requirements
Projected investment needed to replace outdated storages $2 billion
EU-funded Project “Implementation of Ukraine’s Commitments under WTO and ENP Frameworks in the Rural Sector (Sector-Wide Approach)”
Ukraine FFV Cool Chain
Large losses; Ukraine is losing around 5mn tons of harvested potatoes, vegetables and fruits, costing Ukrainian growers and traders over a billion US Dollars
Poor storage quality: Only 4% of cold storage for potatoes, 10% for vegetables, and 19% for fruits meets with modern requirements
Production is growing faster than storage capacity, placing pressure on markets after harvest
EU-funded Project “Implementation of Ukraine’s Commitments under WTO and ENP Frameworks in the Rural Sector (Sector-Wide Approach)”
Ukraine FFV Cool Chain
Ukrainian firms currently spend about US$50mn on new storage facilities for fruits, vegetables and potatoes every year
A further US$2bn needs to be spent in FFV cool storage. Most of the new facilities are distribution centres for trade rather than storage.
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Transport of Fresh Produce
In Ukraine, losses during transportation are much greater than in the EU for the following reasons:
1. High temperatures prior/during loading onto trucks
2. Poor packaging
3. Transportation without refrigeration
4. Transportation without isolation during cold season
5. Drivers often try save diesel turning off refrigeration
6. Poor quality roads
7. Multiple re-loading due to an unstructured market
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Ukraine FFV Cool Chain
Existing cold storage for fruit and vegetables. Capacity (brown) vs. demand (red), thousand tons.
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Estimated Need for Cool Storage Capacity
Region Storage capacity required, thousand tons
Potatoes Vegetables
Fruit Veg+Fruit
West 1,761 486 135 621
Centre 1,658 403 78 481
East 547 265 53 318
South 133 279 32 311
Ukraine 4,099 1,433 298 1,731
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Viability of cold storage investment (USD/ha)
Indicator Potatoes Apples Onions
Carrots
Project size, ha 250 60 40 25
Production investment
8,000 18,850 5,000 5,200
Storage investment
9,800 26,775 25,000 22,000
Prod operation cost
2,667 4,800 6,400 2,167
Storage operation Cost
373 1,470 1,493 1,517
Storage premium by May 15
365 9,500 9,880 14,592
Quality premium 747 2,100 1,493 2,357
Payback time, years
24 4 4 2
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Investment Directions in the Cool Chain
Over the next few years, demand for the following types of facilities are expected to grow:
Modern cold storage facilities at farm level for vegetables (as well as pre-cooling)
Controlled Atmosphere facilities at large fruit farms
Modern facilities near large cities, used as distribution centres for wholesalers, importers and retailers