«Such an information feed can become a price catalyst»
Severe frosts that continue across a large territory of Central Russia can become a large-scale problem for agricultural producers, primarily those specializing in fruits. Gardeners in the Black Earth Region are already sounding the alarm because the severe frost has killed the already blossoming flowers of apple trees and other fruit trees: this means that traditionally the most “garden” regions of the country are facing severe crop failure. And then it will be the turn of consumers to be sad — there will be few apples and they will become more expensive.
“Traditionally popular varieties of apples are indeed predominantly grown in Russia,” notes consumer market analyst Mikhail Lachugin. — And in recent years, many so-called intensive gardens have indeed appeared in the central and southern regions of Russia — these are Lipetsk, Tambov, Voronezh (it is in these regions that the possibility of introducing a state of emergency due to frosts that destroyed flowers is now being discussed — “MK”). But at the same time, there are also many alternative suppliers — these are Armenia, Azerbaijan, the countries of Central Asia, Moldova, Serbia, Türkiye and even some African countries. So, due to frosts, it is unlikely that there will be global problems with a shortage or a sharp rise in price of apples.
According to the expert, the frosts did not affect the south of Russia either — for example, Kuban, which has a significant share in fruit production. In other words, there should not be a serious shortage. But it is much more likely that suppliers and retailers will begin to raise prices, citing spring frosts.
“Such an information feed can become a catalyst for prices, as happens regularly with bananas,” notes Lachugin. — After every news related to possible supply disruptions, the media becomes hysterical and prices rise. We have to watch carefully who tries to play this with apples now.
Large agricultural holdings that supply apples to retail chains and industry most likely will not go bankrupt as a result of frosts — although the situation is unpleasant for them, the expert admits. However, in most cases, the future harvest has already been paid for by customers, and losses from its non-delivery — are insured.
“When a large network finds a major partner in agricultural products, it agrees to buy back the standing crop,” the expert explained. — Agree on the amount, discounts — and when the crop is harvested, it is taken to the net. But if force majeure occurs — everything is insured. And as for the availability of apples — large chains usually try to have several supply partners.
The situation for manufacturers is unpleasant, but provided for by business plans — This is agriculture with its inevitable risks, the expert emphasized. But who will have to really cry — This is for private gardeners: what they grow for themselves and for small sale, of course, no one insures. Therefore, even in traditionally apple regions, you will have to buy fruit this year.