Expert: making a professional forecast in the fruit and vegetable market is very difficult


Expert: making a professional forecast in the fruit and vegetable market is very difficult

02/18/2020

Andrey Yarmak: forecasts on the fruit and vegetable market are not predictions and fortunetelling

It is not easy to make a forecast for the fruit and vegetable market – you need to collect a lot of data, you need to understand how supply and demand for various products work, and conduct fairly deep research. Forecasting is different from prediction or fortune telling, writes Andrei Yarmak, an economist at the FAO Investment Department, on his Facebook page.

“Before the next stage of reducing the price of potatoes in Ukraine begins (it looks very likely now), I would like to recall how forecasting differs from prediction or fortune-telling.

In September, when potatoes were 11-12 UAH / kg, we talked about the likelihood of a price reduction. Now potatoes are 40% cheaper. I have been talking about this since 1997, but it is always relevant. And, surprisingly, it is becoming increasingly relevant, ”recalls Andrei Yarmak.

“The forecast is based on fundamental factors, and although it may not be 100% accurate, it ALWAYS accurately shows the factors that influence trends.

The fundamental forecast shows trends almost always correctly. An exception is if there is force majeure, that is, completely atypical weather conditions (such as in the summer of 2018, for example, or in the summer of 2010), revolutions, sudden trade embargoes, sudden devaluations, revaluations, etc., ”SEEDS quoted the expert as saying.

See also: Stocks of potatoes, carrots and onions in Poland were higher than market expectations – prices fell sharply

“It is not easy to make a forecast – you need to collect a bunch of data, bring them all together, you need to understand how supply and demand for various products work, and conduct fairly deep research. It is very EXPENSIVE – count about 2 months of work of 5-7 specialists of the corresponding qualification!

That is why forecasts for the fruit and vegetable market in Ukraine are made only by one company that has a built-in forecasting system. The rest make statements in which they give predictions or just fortunetelling. Associations, unfortunately, also do not have the physical ability to make such fundamental forecasts, because they need expensive specialists, ”said the FAO representative.

“At one time I insisted that the forecast should not be made public, otherwise, at the time of announcement, it may immediately become irrelevant. Therefore, I know that they are now selling these forecasts for money, and partially, they voice it at their events.

This material had only a hint of a fundamental forecast – it was not a forecast. His goal was not to influence the market, but to draw the attention of market participants to the need to fundamentally analyze supply and demand and pay attention to all factors, including psychological ones, ”emphasizes Andrei Yarmak.

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