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Prices plunge due to oversupply

Spain: Potato prices fail to cover production costs

The potato campaign started timidly in Andalusia and Murcia in late May. "There were still potato surpluses on French warehouses and, for some time, French potatoes and the first Spanish ones coexisted in the market," explains Yolanda Medina, head of the Technical and Quality Department of Carsa.

The Andalusian harvest was characterised by a very high quality, a good production volume and above average yields. Cartagena started harvesting later due to the torrential rains of Christmas. This resulted in the campaign kicking off one month later than usual and overlapping with the start of the campaign in Castile-Leon in the first week of July.

Even though there were some good moments early in the campaign, with a balance between supply and demand in Andalusia and Castile-Leon and a staggered harvest, this situation changed from the first week of August. "The excessive heat caused an advance in the start of the harvest, the potatoes yielded by the high temperatures, entering into production all at once, which led to the entire supply concentrating within a short period of time," comments Medina.

The price fails to cover the production costs
Given the excessive supply, prices plummeted, going from the exceptional 0.20 to 0.35 Euro on average recorded last year to failing to cover the production costs, with all varieties below 0.12 Euro per kilo.

The arrival of some French exports also partly contributed to this collapse of prices. Also, Andalusia propitiated this concentration of the offer in August and early September. Worthy of note is that Andalusia exports most of its production, and although it started well, the widespread heat in Europe also advanced the harvest in the countries which normally buy Andalusian potatoes.

The situation is of great uncertainty, because due to the climatic conditions there is a lot of production and no demand. "The market currently has no capacity to absorb so much production, and there are still potatoes in the ground that are gradually losing their properties." The picture could improve if France reduced its current exports and Portugal increased its imports, which have so far been low.


Source: eleconomista.es

Publication date: 9/27/2017


 


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