China: Price of new potatoes falling

Since September, farmers have been digging out their potatoes. The weather conditions during the growing period year were fine, so the growth and output is better than last year. However, right before shooting sprouts were to be harvested, a lot of rain fell on in the production areas. This has caused diseases affecting the crop to be a little more severe than last year and the quality to be worse. People within the industry pointed out that the current break-even price for good products is no lower than 1RMB (0.13 EUR) per kilogram, while bad products only sell at 0.6 - 0.8 RMB (0.76 - 0.1 EUR) per kilogram. 

Actually, since potatoes from Shandong province, Henan province and Hebei province and other locations hit the market en masse, in June, the price has dropped sharply: it fell from 2 RMB (0.25 EUR) to the current 1.2 RMB (0.15 EUR). Since the beginning of September, when potatoes from the provinces (Inner Mongolia, Gansu, Shanxi, Shaanxi and Dongbei) entered the market one after another, market supply has increased progressively so the price dropped even further. 

The number of plantations and yield per area unit are the two decisive elements that had an impact on the price of potatoes. This year, the scale of potato plantations was influenced by the good market prices during the first half of 2016, as land owners and producers in eastern China and the northwest expanded their potato areas massively. Also in the provinces of Jiangsu, Anhui, Henan, Hubei and other regions, this expansion has been very obvious, as some of the plantations even doubled in size. This has led to a huge rise in supply. 


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