Russia keeps on ramping up greenhouse vegetable production. Lots of greenhouse facilities are upgraded, new ones are build along with, new technologies of protected gardening are adopted. With that, most of greenhouse vegeculture investment projects, which are planned to be launched by 2020, are concentrated in the Central part of Russia (around 600 hectares of greenhouse facilities) and in the southern region (over 200 hectares).
According to the Institute for agricultural market studies, the market share of homegrown cucumbers increased by 20 pct and reached 85% in 2013. Such an achievement is due to the increase of greenhouse gardening output (by 40%) from one hand, and considerable cut down on imports – on the other hand (by 55%).
Over the period under review, homegrown tomato market share has also increased by 20 pct to reach 40%, moreover the most sizable step forward was made in 2016. This upward trend in tomato production is associated with decreased profitability of growing cucumbers. Though the cucumber market capacity is stable by volume, the tomato market total capacity decreased by over 30% in the last few years.
According to the Russian Ministry of Agriculture, greenhouse farming output ramped up by unprecedented 25-30% in 2016. Gross cucumber yield was 820-850 thousand tons at-the-year end 2016.
Import volume of fresh cucumbers decreased by 1/4 in 2016. Traditionally the peak import season coincides with the winter period, when the domestic facilities cannot fully cover market demand.
Tomatoes import, in its turn, shrank by 1/3. The serious decrease occurred in between April and June 2016, when Turkish suppliers left the Russian market. Tomatoes from Morocco and Azerbaijan have partially replaced Turkish tomatoes.
Despite the increasing output of tomato and cucumber farming, the prices remain high during the winter period. Russian domestic producers did not yet have an opportunity to properly increase output when Turkey left the market. Greenhouse farming market is quickly becoming highly saturated and thus competitive. There is a long way to go before the imports phase-out program is completed, but the investors already struggle to receive the appropriate margin.
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