UNPT Emphasizes the Need for Quality over Quantity
According to the latest press release from the National Union of French Potato Producers (UNPT), COVID-19 has shaken up all predictions and profoundly changed the fundamentals of the 2019 campaign.
On the fresh market, it has meant a revival in terms of household consumption. For the industry, on the other hand, it has caused factories to slow down due to the very sharp decline in restaurant activity all over the world. The contracted volumes are processed late, the stocks of finished products are high and the pandemic is now impacting the entire planet, forcing factories to adapt their production and marketing strategies for the 2020/2021 campaign. However, some potato volumes that were intended for processing have been redirected to alternative outlets, causing severe losses for all links of the chain.
2020 campaign (fresh and processing)
The early campaign is marked by its dynamism and looks positive overall, even if an abundant supply in the past weeks, from historical and non-historical basins, has led to a price drop. The surface areas have progressed slightly in 2020 (+1.4% in France and 0.5% in the NEPG level). In the current state of crops, the yields look average (based on UNPT samples) and are identical to the ten-year average for the second sample (weeks 31-32), but with a more advanced physiological stage, and aging that increases with the heatwave. The final production should be between 6.5 and 7 million tons, barring any major event by the end of the season. For starch, the year 2020, marked by drought (95% of the land is not irrigated), looks tight once again in terms of production. The UNPT plot samples place the year 2020 at the level of low yield years.
The most optimistic predictions anticipate a return to 90% in the fall, but this European vision does not necessarily take into account the repercussions of the pandemic on other continents, and especially its evolution in the coming months. The stocks of finished products will remain high and will need to be taken into account. As for the fresh market, we hope that the boost in consumption that accompanied the lockdown will be confirmed in the coming months and will revive the market.
Analysis and recommendations
If not for the pandemic, 2020 would have been considered a balanced year in terms of offer and demand. But in the current context, prices on the free market for the industry are likely to suffer from the excess of supply. Therefore, UNPT recommends that potato producers be very vigilant, so that their production meets the specifications of the buyers and the demand from consumers, on the fresh and processing market, especially when it comes to contracts. If favoring quality will be essential, UNPT advises against using the volumes that will congest the market, and recommends not to invest in irrigation as well as to top kill early in order to avoid unnecessary risks. Good conditions will also be essential for uprooting.
Finally, for 2020/2021, in this difficult context without any clear visibility, UNPT asks all actors of the sector to respect the fundamentals of the market. It is important to win back French consumers for potatoes, to boost exports on the fresh market and to find, generally speaking, a maximum of outlets and value for our potatoes.