The Unexpected Virtues of a Prolonged Winter

The Unexpected Virtues of a Prolonged Winter

The Unexpected Virtues of a Prolonged Winter

The FINANCIAL -- In May 2018, VEGETABLE prices decreased for the second consecutive month, and the m/m decline in prices (-11.1%) dropped to their lowest value since last July. As a result, the y/y change in VEGETABLE prices, after a small upward change in April, shrank again and was reduced to negative 9.8%. Interestingly, the y/y change was positive until the end of 2017, but remained negative from the beginning of the current year.

On the product level, all of the prices of greens, which the AGRIndex tracks, increased; green haricot beans prices increased the most. This legume vegetable price added almost one-fourth to its May 2017 value in the last 12 months’ time, which is consistent with the 35% decline of green haricot bean production in 2017 (2,900 tons, GeoStat), compared to 2016 (4,500 tons, GeoStat). The same logic, but the opposite result, is also true for garlic. The price of garlic dropped by 22%, the largest drop since the last May, while production increased by 20.7% (2,900 tons in 2016, and 3,500 tons in 2017, according to GeoStat).

On the other hand, the overall y/y change are mostly due to the drop in tomato (-19%), eggplant (-14%), and cucumber (-11%) prices. It should be noted that the lower prices of these seasonal vegetables in May 2018, compared to the same month of the last year, are not the result of increased production, but rather of a prolonged winter at the beginning of 2017. The prolonged winter shifted the active harvesting season for seasonal products later, resulting in somewhat higher prices, than usual at the end of spring 2017.