Spain: Oversupply and low consumption drive potato prices down

Castile-Leon's potato campaign started in Salamanca three weeks ago with great difficulties due to the low prices of early potatoes in southern Spain; a product which is still stored in chambers, awaiting to be sold. The situation affects Cordoba Antequera, Seville, Cartagena and Extremadura, which have delayed their campaigns as a result of the high temperatures and have additionally increased their production volumes.

"The transition from early to mid-season potatoes in northern Spain is still very complicated because of the excess of supply in the market from producing areas that should have already finished their campaigns and have not yet been able to sell their production due to this year's significant drop in consumption," says Isaac Bermejo, manager of Patatas Hermanos Bermejo. "To this we must add that Portugal's potatoes are also entering Spain at very low prices." 

Spain has increased its acreage this year by around 25%, with a yield per hectare which has also grown by 30% thanks to the suitable weather conditions for this crop, namely the mild temperatures during the spring. 

Salamanca has 4,800 hectares planted this year, and Valladolid 5,714 hectares. These are Castile-Leon's two major potato producing provinces, as they account for 50% of the 20,600 hectares planted this season.

 

However, this growth in production volumes has not been accompanied by consumption, which has dropped by between 8 and 12% compared to last season. As a result, prices have plunged. 

"While last year a kilo of fresh potatoes had a price at origin of 40 cents, this year it barely reaches 6 to 12 cents, depending on the variety," continues Isaac Bermejo. "We have rarely had such prices in July, being more common in September, when the market usually becomes saturated. The market now has already collapsed, and as such in late August and early September we will surely have warehouses full of produce we will be unable to sell," he warns.

The situation is very difficult and Isaac believes it will worsen as French potatoes start being imported, as not only have they had an earlier harvest, but they also expect a big production.

"French potatoes usually start being shipped to Spain from November, making use of the trucks returning from the Spanish citrus export season. However, this year, given its increased production, the French will try to start shipping their potatoes to pain earlier than usual to prevent a market collapse."

With a warehouse in Ejeme, Salamanca, Patatas Hermanos Bermejo produces and sells about 18,000 tonnes of potatoes per year from all producing areas in Spain. It also imports seeds from the Netherlands and potatoes from France or Belgium when there is no domestic production. 

The company distributes Jaerla, Red Scarlet, Agria, Fábula, Frisia and Red Pontiac potato varieties, mostly to hospitality businesses and wholesale markets in Spain and neighbouring Portugal, where even worse results are expected than in Spain given its increased production volumes this season.