Confidence in potato market

Like previous lockdowns, demand for packing potatoes is stronger as people stay at home and cook more meals for them and their families.

Bakers are especially popular because of the winter weather, with significant premiums paid for King Edwards which are in scarce supply. Maris Pipers fetch up to £275/tonne in England and £190/t in Scotland, according to the AHDB, which is nearly twice the price of generic whites. At-home consumption of potatoes was 14 per cent higher in the first nine months of 2020 compared to 2019, according to AHDB, which outweighed a 28 per cent drop in out-of-home sales. That trend has been seen across the world with US and French retail potato sales up 10 per cent, while the closure of restaurants has led to at least a 15 per cent reduction in out-of-home sales. Although British fish and chip shops remain open, reduced footfall is reducing sales and English chipping potato prices are fetching £120/tonne, half what they were in late February last year before the start of the Covid-19 crisis.

Major processors are paying £80/tonne for free-buy Maris Piper, although the open market only accounts for 10 per cent of sales in that sector.

Scottish, English and Welsh seed potato growers and traders are still reeling from the news that they will not be able to export to the EU, which will include sales to Northern Ireland, as part of the post-Brexit deal.

The UK exports £65 million in seed potatoes a year, mainly from Scotland, with a third shipped to the EU plus extra volumes to Northern Ireland.

Trade to the main destination – Egypt – will be able to continue after an agreement was made with the country.

The NEPG European alliance of potato groups, which includes GB, has urged growers to reduce their potato areas by 20 per cent year to help rebalance the market.

Meanwhile, processors in Belgium and the Netherlands have reduced the volume of contracts they award.

Reducing the potato area by a fifth could raise the prospect of a large shortage of potatoes especially if yields are low and there is a return to out-of-home demand during the 2021/22 season.

Source: FG Insight