South Africa's potato market is under pressure as growers face prices well below production costs following a bumper harvest and expanded plantings.
In recent weeks, prices at fresh produce markets have declined to between R3.50 and R4 ($0.18–0.20) per kilogram. This is about R2 ($0.10) below estimated production costs and nearly 50% lower than the same period last year, according to FreshPlaza. High yields and a mild winter, combined with aggressive planting, have pushed volumes higher and driven prices further down into October.
Increased hectares and overlapping harvests
This season saw multiple regions increase hectares under potato cultivation, encouraged by favourable weather and strong seed availability. Limpopo alone is projected to market an additional 12 million 10kg pockets between July and December 2025. Overlapping harvest periods between regions intensified the surplus, with more potatoes entering markets simultaneously.
Potatoes South Africa noted that increased hectares planted and yields, combined with bottlenecks in distribution timing, created a supply surge that outpaced demand.
Outlook and risks
Agricultural analysts expect prices to continue falling through October before stabilising at lower levels. FreshPlaza indicated that prices may settle at around R3.50 ($0.18) per kilogram for the remainder of 2025. At these levels, many producers are operating at a loss.
FP Coetzee, Potatoes SA's manager of information and regional services, expressed concern over the financial sustainability of some producers. "There is definitely a chance that some farmers will not make it," he said. "It depends on how your business is structured and whether you have the financial ability and resources to withstand a difficult season. If you didn't save money during the good years, a year like this can certainly force you to stop farming."
Implications for producers and consumers
For producers, the price slump raises the possibility of farm exits, particularly for growers unable to absorb high input costs under reduced returns. For consumers, however, lower prices may provide short-term relief on food costs.
Grow Fresh Produce Agents has urged retailers to reflect the lower wholesale prices in retail outlets. The organisation noted that since potatoes in South Africa are primarily consumed fresh, stock cannot be carried over to buffer against market fluctuations.
Industry bodies and producers are now focusing on measures to manage future volatility, including improved coordination of harvest timing, regional planting strategies, and the use of financial risk tools to mitigate price collapses.
Source: Moneyweb
