Garlic price hits record high in Ukraine. How to make money on it

Since mid-December, prices for garlic on store shelves have confidently crossed the 200 UAH per kg mark. In hryvnias, this is an absolute record. During the pandemic, this vegetable was cheaper, because before the war it was still grown in large fields in some places.

Now there is nothing to extinguish the flames of demand for this burning vegetable. It is difficult to find even a couple of batches in Ukraine, and importing quality garlic is too expensive.

LIGA.net figured out why this is not a dead end? What new opportunities does expensive garlic open up?

Burning prices

Garlic has set a record – its prices have crossed the 200 UAH per kg mark since mid-December. This is the most expensive in history. Even during the COVID 19 pandemic and at the beginning of the Russian invasion, when demand for garlic increased, this vegetable did not cost more than 160 UAH per kg.

In those days, there were inventories to meet trade needs – both through imports and from Ukrainian producers.

"It is very difficult to find even two tons of marketable garlic for our own production. There is no sustainable cultivation of it in Ukraine. There are only small batches from vegetable gardens, of different quality and varieties. It is not suitable even for retail chains. What can we say about industrial processing," Serhiy Shysh, director of the Evroshok group of companies (garlic processing, trademark "Vse po chasnyku"), told LIGA.net.

Garlic has risen in price due to a combination of several factors. First, demand for it has increased in Europe. Experts attribute this to the increase in the number of emigrants from countries where garlic is an important component of national cuisine. In German and Austrian supermarkets, the average price is about 6 euros, although there are cases with sky-high prices of almost 20 euros per kilogram.

Secondly, there is not enough garlic for everyone – supply lags behind demand. The main garlic producer in the EU is Spain.

"This year, Spanish garlic producers have completely exhausted their stocks, which has not happened in the last three years. This happened due to weather conditions, increased labor costs and transportation. Now even alternative suppliers (from South America. – Ed.) have exhausted their stocks, which will allow prices to rise until the new season," predicts Danny Dean from the Dutch company Denimpex (a vegetable importer).

According to him, European suppliers have already exhausted their quotas for importing Chinese garlic into the EU. Therefore, now it is imported with a fine of 1,200 euros per ton. Therefore, the price is rising, but people still buy garlic.

So, Ukraine has problems with importing garlic – it is too expensive. And there is no sufficient volume of its own vegetable. Cases when small batches of Ukrainian garlic were exported to Japan are an exception.

According to the State Statistics Service, in four years, since 2020, the area sown with garlic in Ukraine has decreased by almost 15% – to 21,000 hectares. Almost all of it is grown by small and family farms. Wholesale buyers suspect that official statistics exaggerate the area.

"In any case, this year I haven't seen garlic fields over two hectares. Although before the war there were fields of 50 and 70 hectares," says Serhiy Shysh.

Teasing possibilities

The main problem with garlic cultivation is the need to attract a large number of workers. Over the past five years, no equipment for mechanizing garlic cultivation has been imported into the country – not a single seeder, calibrator, or combine harvester.

Although even with the costs of manual labor, the yield of garlic is impressive – if the technology is followed, the income per hectare should be equal to the cash flow from 40 hectares sown with corn.

"This is almost guaranteed. With current prices, it is possible to achieve parity with 70 hectares of corn," says Serhiy Shysh.

According to his calculations, under an intensive cultivation system, the costs per hectare of garlic reach 17,000 US dollars.

"But the income from this hectare will be up to 40,000 US dollars," says the entrepreneur.

According to Serhiy Parashchenko, founder of the company "Pure Product", in the case of manual processing, it makes sense to grow up to 5 hectares of garlic. At least 5 people will be required to cultivate such a field.

"For processing fields of 10 hectares or more, mechanization is definitely needed," he says in an interview with kurkul.com.