OVERVIEW GLOBAL POTATO MARKET

In Europe, the heat has caused a decrease in the consumption of potatoes, but also in the regrowth of new potatoes in the field. At the moment, this is resulting in difficult market conditions. Besides, the coronavirus has had a major impact on the market, especially on the processing industry, which is not yet running at full speed. However, this doesn't apply to all markets. Switzerland has seen record sales, prices have increased in South Africa, and the potato acreage and prices are also on the rise in China.

Netherlands: Difficult sale of early potatoes
The early potato season is currently marked by difficulties, reports the director of a Dutch potato auction. "In the beginning, sales went rather well and the first weeks of the summer holiday were still reasonably good, but with the heat the situation became much tougher. The volumes are also smaller than in other years. There is a lot of uncertainty in the market. The factories are slowing down, the futures market completely collapsed at one point and everything went into free fall. This made it difficult to do business. Traders have been stepping away and with September in sight, the early and mid-early varieties will be cleared out before the storage potato season approaches."

"The prices were already not that high, but what the factories are currently paying is completely disastrous. Hopefully, some more volumes will soon be sold, including some for export," said the auction director. He also expects yields to be disappointing. At first, it was said that the harvest would be average, but the warm weather has had a significant impact on the regrowth, with trial harvests scoring increasingly below the five-year average.

Germany: Domestic potatoes dominate
German potatoes dominate the domestic market. The supply is huge at the moment and is more than enough to meet the demand. Due to the holiday period, sales are still relatively difficult; however, traders see no reason for price adjustments, so potato prices have remained generally stable. The domestic supply is complemented with batches from the Netherlands, France, Israel and Italy, but the market share of imported potatoes is currently declining rapidly.

United Kingdom: Potato imports and exports have fallen sharply
Both the import and export of potatoes have been reduced compared to last year. Imports of fresh and processed potatoes in the 2019/20 season amounted to 1.03 million tons, which is 10% below the 3-year average and 33% less than last year. Imports of potatoes for processing have also fallen more sharply since March, when the country was in lockdown and the demand was very low. Exports are much lower than the 3-year average. The free market price remains under pressure due to the increased supply and lower demand. Most potatoes are traded on contract; not much is happening on the free market.

There has been a lot of rain, which was welcome, but has also made the harvest challenging. Some growers stopped harvesting until it was dry again. High temperatures in combination with heavy rainfall have led to internal quality problems. The situation in the processing market was stable last week, with better demand following the government's "Eat to Help" scheme. The return of children to school in the coming weeks will also contribute to boosting the demand for potatoes for processing.

France: Difficult months ahead for the French potato market
“The situation in the potato market is currently tough. The early harvesting in Beauce and the limited consumption of French families have led to the supply being greater than the demand,” says a grower. “The factories, covered by their contracts, are absent on the free market. It is still an effect of the coronavirus. The situation on the fresh market looks more positive so far, but the period between September and December will be difficult. The volumes that are not used by the industry will certainly increase the supply on the fresh market. The uncertainties about storage, after the use of sprout inhibitor CIPC has stopped, will make growers want to sell their products quickly. This will ensure a large supply at the end of the year.”

Austria: Market stabilizes
The Austrian potato sector has entered somewhat calmer waters at the beginning of the storage period. The season for the early varieties is almost over, so the pressure on the market seems to be easing as well. Prices amount to around 10-12 Euro / 100 kg for the normal calibers. The large sizes, however, "only" generate between 5-8 Euro / 100 kg. Due to the low prices at origin in this latter market segment, many are looking into the potential of exporting to Eastern Europe. “We hope to find buyers in Romania and Bulgaria in particular,” said a grower.

Switzerland: Potato sales break all records
Potato consumption in the first half of 2020 was the highest in the past 12 years. In total, the Swiss consumed 52.4 million kilos through the retail. However, prices were comparable to the average for the past three years. In total, sales have increased by 5.8 percent in the past six months as a result of the coronavirus pandemic. In recent years, there had always been a decline or stagnant sales. Lastly, the Bundesamt für Landwirtschaft (BLW) points to the increasing popularity of processed potato products, including French fries and rösti.

Spain: Prices at an acceptable level; large sizes suffer the most
The Spanish potato market has been revived in the summer with the season in Castile-Leon, the country's main producing region, where the harvest is now in full swing. Despite the difficult situation, marked by the decline of sales in the hospitality sector due to the spread of the coronavirus, the prices of washed potatoes remain at an acceptable level and are exceeding industry expectations. Consequently, other regions that will start up soon have good prospects.

Castile-Leon has had a difficult spring with a lot of rain, so growers carried out the planting very gradually. As a result, the product is arriving in a staggered manner, which also ensures a better organization of the supply and will make it easier for prices to be kept at the right level, contrary to what the sector had expected. In the summer, the sales volume hasn't been sufficient because of the lack of tourists this year. However, the loss of turnover in the catering industry is partly offset by increased consumption by households.

Despite the optimism generated by the prices of quality washed potatoes intended for supermarkets, which have been profitable for the grower, the large potatoes intended for the catering industry have been struggling with falling prices due to the declining activity in this sector. Since it is difficult to sell those large sizes, growers try to get fewer of these calibres, so they can be sent to the market. Moreover, France is already starting to ship potatoes to Spain. Normally they sell more when there is no production on the Spanish fields and that won't happen until November.

Italy: Summer temperatures are not helping with potato consumption
In general terms, the 2020 new potato campaign has been good, even though it hasn't been possible to reach the peaks of the previous year. Fortunately, the limited stocks of potatoes from the old crop were sold quite quickly during the lockdown period, slightly faster than the all-time average. Currently, due to the summer heat, there has been a drop in consumption compared to previous months, as reported by Unapa, the Italian national union of potato producers.

If summer temperatures don't motivate potato consumption, it will be necessary to wait until the autumn months (September / October) for a recovery. There is currently production available from Central-Northern Italy. The volumes are good, as is the quality, and prices are stable. Only in the area of ​​Bologna are there some problems related to Agriotes litigiosus. Lazio, Abruzzo and Veneto have obtained good productions. Moreover, Sicily has almost started sowing. Compared to other countries where the potato harvest is more concentrated in a given period, Italy has a harvest schedule that runs from late March to November. The acreage remains virtually constant year after year.

Italy is not self-sufficient in terms of production, so it imports about 10-11,000 tons of potatoes annually, mainly from France. In recent months, the dry weather that has affected the countries of Central and Northern Europe, such as France, has prevented good tuber production. Despite the limited expansion of the potato acreage (about 1%), the forecast of medium yields may lead to a reduction in the volume of potatoes intended for export, which should be beneficial for the sale of Italian products from the autumn months.

China: Growing potato acreage
The potato market has been very active in 2019, so growers in the North region are enthusiastic about this year's production. This season, the potato acreage in Gansu has expanded by 7%, and that in Inner Mongolia has grown by 10%. Although the acreage has increased, several important potato growing regions in the north haven't had favorable conditions. Some production areas reported cold weather in April and hail in May, resulting in a severe drop in the total potato production.

As for prices, recently, the wholesale price for potatoes has stood at around 2.4 yuan / kg (0.29 € / kg), 7.2% higher than last year. In addition to the decline in the production due to price increases, heavy rainfall has regularly been recorded in the south since the beginning of the summer. As a result, vegetable prices have remained at a high level and this has stimulated the demand for potatoes and given prices a boost.

Many important production areas are approaching the harvesting season; the southwestern production areas will also start harvesting soon. The market supply will continue to increase. Due to the heavy rainfall this year, the risk of spoilage in storage is higher. Potato growers are therefore expected to reduce their stocks and accelerate sales. The volume of goods entering the market is expected to increase sharply in the later period.

United States: Fairly good transition to the new season
The potato processing industry has good stocks at the moment. The transition from the old crop to the new crop went reasonably well in Minnesota. The potatoes are also on time this year and the volumes are normal, which was not the case in the two previous years. At the moment, there is a particularly high demand for potatoes for processing into products for the retail trade, but the extra demand has already leveled off. To a large extent, the coronavirus continues to determine the situation of the US potato market. According to growers, planning the production and packaging this year will be a challenge.

South Africa: Good prices welcome by growers
The South African potato sector is currently enjoying very good prices, higher than 60 ZAR (3 Euro) per 10 kg per bag, due to the low volumes available on the market. The Western Free State season is coming to an end, while the main one in Limpopo is just starting. Due to the increasing decline of the South African Rand, tractors, agricultural implements, fertilizers and diesel are becoming more expensive. After all, many of these resources are imported. The current sales price is therefore very welcome. Given the fragile state of the economy, caution is advised against possible consumer rejection to the price, but for the time being, the demand for potatoes seems strong. It is what could be called a classic case of a low supply pushing prices up.

Australia: Storms cause shortages until early spring
Western Australian potato growers have been hit by a number of severe storms in late fall / early winter, which has led to shortages in the supply that will persist until early spring. Later harvests are looking good and the supply will grow again in the coming weeks, said the main trade association in the country. The processing industry is also recovering from the "dramatic impact" of the coronavirus, as sales crashed when lockdown restrictions were implemented. The sector is concerned about the possibility of a significant oversupply in the Australian market and the potato industry is lobbying the federal government to ensure that frozen foods are not dumped.

In total, 1,380,385 tons of potatoes worth AUD 752.6 million were produced across Australia in the year ending June 2019, according to the latest Hort Innovation statistics. These figures have remained relatively stable compared to the previous year; however, exports have increased by 26% to 45,912 tons, and the value of those shipments has increased by 10 percent, to AUD 30.7 million. The main market is South Korea, which accounts for 38% of all exports.

For next week: Overview global pomegranate market


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