The Northern European potato market is quiet. Dutch exports are disappointing, Belgium hopes for a rebound in prices in the coming weeks and the German market shows no whims. In Scotland, growers have some concerns for the coming season. The wet soil could hamper the planting. Further south, French and Italian traders have a good market with great prizes. The Spanish stocks have been almost fully depleted; there are complaints from French traders, who find Spanish prices are too low and therefore are not exporting. The harvest this year will probably start earlier due to the warm weather. Growers in other Mediterranean countries are also looking forward to the start of the season. In Cyprus, the impact of frost could result in smaller sizes; Egypt expects a lower production and Israel has again predicted low prices in the domestic market. In the U.S., producers have had a good harvest and there are consequently greater volumes in storage, but the market is stable. In Australia, prices are low due to a large supply and low demand. The industry is trying to increase consumption. In China, the government has prepared a plan to add potatoes to the list of staple foods, next to rice, wheat and corn.
Israeli market flooded with potatoes
Potatoes are an important product for Israeli companies. They are considered essential for both the local market and for export; in the last season, the country produced a total of 625,000 tonnes, of which around 350,000 tonnes went to the domestic market or processing. The remaining volume was exported. The sector has a total turnover of approximately 250 million Euro.
About 30 different varieties are used for the product's cultivation. The domestic market has a clear preference for the white and red varieties. There are also white varieties for export. The Winston and Mondial are the main white varieties, followed by the Draga and Almera. The Desiree is the most popular red variety. Of the yellow varieties, the most noteworthy are the Annabelle, Vivaldi and Nicola; these potatoes are mainly intended for export.
Last season, the domestic market was flooded with low-priced potatoes after growers were forced to seek alternative marketing channel, given the Russian economic situation. This scenario is expected to continue unchanged in the coming season. Production remains high and exports are still relatively unattractive. Consumers in Israel can thus look forward to attractively priced potatoes next season.
Smaller volume expected in Egypt
Last season was marked by a large production volume, which resulted in difficult sales for the growers. This year, a considerably smaller volume is expected; this will likely result in good prices on the domestic market, but exports should still yield low prices. Exports to Europe are becoming increasingly difficult, both because of stricter import rules and the competition from European countries. The Egyptian sector ships the potatoes to Europe, Asia and the Middle East. Each of these markets has its own preferences. Asia prefers potatoes for processing, the Gulf region and southern Europe prefer large potatoes, and northern Europe demands smaller sizes.
Good prices in Italy
In this southern European country, the first month of the year is usually a good month for the trade of potatoes. At present, demand is good and there are small volumes of high-quality potatoes available. Both in France and in Italy prices oscillate between 0.35 and 0.40 Euro per kilo. The first new potatoes from Tunisia are expected to arrive with some delays. As demand grows, prices are expected to increase.
The market for potatoes from Bologna was good in December. For the whole of Europe and the Mediterranean countries, a late winter is expected in the regions where the first new potatoes are harvested. This may have a negative impact on the crop. On the wholesale market in Bologna prices have ranged between 0.50 and 0.70 Euro per kilo for 10 kilo bales. Smaller formats cost between 0.85 and 0.90 Euro per kilo. In Calabria, the market is also good, with sales exceeding expectations.
French growers keeping potatoes in storage
Although potato prices are higher than in the same period last year, producers are reluctant to sell their stocks. This is because they expect further price increases. Another important factor for French trades is the fact that prices on the domestic market are good, which makes exports more difficult. Slovakia and the Czech Republic are currently not on the market, says an exporter, but Spain, Portugal and Italy have demand for potatoes. The market conditions are expected to change in the first week of February and prices then should fall.
New Spanish harvest expected earlier
The warm weather in autumn and winter is expected to push the season to an earlier start in Andalusia and Murcia, which will kick off two weeks earlier. The trade of new potatoes should begin in late April, which will be a historically early start. Until the end of February, frost could still throw a spanner in the works.
The acreage last year dropped by 25 percent due to the extremely poor results a year earlier, but for the coming season, a slight increase has been anticipated. The stocks in Spain have been almost fully depleted. As a result, around 95 percent of the market is currently dependent on imports from France. However, the French are unwilling to ship large volumes because Spanish prices are too low.
Cyprus: Frost can damage new harvest
During the planting of the winter potatoes, growers struggled with dry weather. Persistent frost during the first few weeks of this year resulted in concerns about the small size of the potatoes for the spring harvest. Exports will remain limited due to the high production costs on the island, although these potatoes are considered a niche product, due to the island's clay soil. This, however, makes the harvest process more difficult, as it has to be done completely by hand.
The harvest of the winter crops, whose season started in November and will last until March, is now in full swing. The winter harvest is similar to that of previous years. The main export markets for Cypriot potatoes are the United Kingdom, Germany and Belgium.
Upturn expected in Belgian potato market
Much is expected to happen on the Belgian potato market, according to a trader. The initial good prospects have been tempered at the start of the season. Prices are good and have increased slightly compared to the previous week. Before the end of the season, the market for quality varieties is expected to be good. Not all potatoes have withstood the storage well, but price increases are expected in the coming weeks for those that have remained in good condition.
Fewer exports from the Netherlands
Exports are an important market for Dutch potatoes, but these are disappointing this season. Southern Europe is purchasing some reasonable volumes, but demand from countries in Africa and other places is lagging behind. This is reflected in the export figures supplied by the NAO. Besides the fact that the export market is quiet, processing companies are also not too busy. Even though these have a shortage of potatoes, they try, by policy, not to allow prices increase too rapidly.
Germany: quiet market
The market is quiet. The supply of potatoes is sufficient and demand remains slightly lower, says a trader. This results in a stable market with no big price changes. The first two months are normally quiet months on the German wholesale.
Scottish growers look forward to dry weather
The British potato market is quiet. Keeping large stocks has been the norm in recent years. East Lothian stored a good harvest. Further north, the season has been wet. There are plenty of stocks, but demand is not exceptional, which results in a quiet market. The mild weather could cause potatoes to run out earlier, so the turnover rate would have to go up. In March, the new plantings will start. It is impossible to make any estimates for the coming season; in general terms, prospects point to a lower volume, but it won't be until May/June before something can actually be said about the new harvest. Scotland has recently had very wet weather, so growers are hoping for a few dry weeks before the planting.
Stable market in the United States
The potato harvest has changed considerably in recent years and even more changes are expected to happen in the future. The market for value-added products, namely specialties, organic and 'bite-sized' potatoes, is growing. The Russet potato remains a major product in the market. These potatoes are currently available in Wisconsin, Colorado and Idaho. Last season was good, with an above average yield. Demands from the food service are changing, with potatoes increasingly selected based on taste.
Compared to previous years, the stock has been higher this month, which is partly due to the greater harvest. Demand is good, with normal up to just above normal figures. A stable price means the market is quiet. Prospects for the coming months are positive.
Low prices in Australia
On an annual basis, Australia, which has year-round cultivation, produces about 1.27 million tonnes of potatoes. The most popular varieties are the Sebago, Pontiac, Desiree, Kipfler, Golden Delight, Cream Delight, Red Delight, Creme Gold, Creme Royale and Red Royale. At this point, growers are concerned about the large supply and low demand, which results in low prices. El Niño has been putting pressure on the crop; the weather phenomenon has caused drought in some parts of the country.
The sector is trying to promote consumption. "Australian consumers find potatoes boring," said a trader. Promotions at national level should help boost consumption. Two percent of the potatoes are exported. Much research is being done on drought-resistant varieties, as well as on the reduction of production costs and on improving efficiency.
China wants to increase potato production
In early 2015, the Chinese Government announced that potatoes would become the country's fourth staple food, together with rice, corn and wheat. China has 5.5 million hectares devoted to potatoes and the government wants to double it to 10 million hectares to keep up with the growing demand from the Chinese cities. In terms of volume, production was stable in 2015 compared to 2014. The country harvested 100 million tonnes, an increase of 3 percent. The most popular varieties are the Shepody and Atlantic. Potatoes are grown all year round in the north and south of the country. The harvest takes place in September and October. The main export destinations are Malaysia, Vietnam, Russia and Pakistan. In comparison with other major potato growing countries, the country's turnover from this activity is low. According to figures from the USDA, Chinese growers make a third of the revenue of their American counterparts.
Each week, FreshPlaza and AGF.nl publish an overview of the market situation of a given product in a global context. With these articles we offer a picture of a world market that is getting smaller by globalisation. Next week, we will not publish the newsletter because of our presence at Fruit Logistica in Berlin. The week after, the focus will be on strawberries.
