A significant crop loss is expected in sweet corn due to the severe drought

The canning industry is also feeling the crop loss (Photo: Pixabay)

In recent years, sweet corn was typically produced on 30-35 thousand hectares, with an average amount of 500-550 thousand tons, while green peas – with a decreasing trend – were produced on 18-20 thousand hectares in an amount between 80-120 thousand tons. In these product lines, the interdependence of production and the processing industry is very significant. Together, these two vegetable crops account for 60% of the domestic vegetable growing area. 90-95% of both products are consumed by the refrigeration and canning industry, which accounts for 2/3 of the output of the fruit and vegetable processing industry. At the same time, it is also true that sweet corn and green peas account for 70-80% of the raw material purchases of the refrigeration and canning industry, so capacity utilization is determined by these two crops.

The problems appeared before the start of the season

During the negotiations related to the spring production contracts, it became clear to the processors that they either accept the producers’ proposal for a significant price increase, or they acknowledge that the size of the available production areas and the amount of raw material may decrease to a large extent, which leads to unused capacities and a significant decrease due to the lack of commodity base. would have caused a loss of market for the sector. In addition, as soon as the production contracts were concluded, the Russian-Ukrainian war broke out, exploding the sector’s already rapidly increasing costs, especially the electricity and natural gas costs, which hit the processors extremely hard. Even before the crisis, the cost of energy accounted for nearly 10 percent of the total cost of frozen and canned products, and then this cost factor increased five to ten times over the past year, especially in the preceding 4-6 months.

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