UK: Potato Prices Weaken as COVID-19 Fears Remain
Most potato crops in the UK were planted following the wettest February ever, before enduring one of the driest springs on record, according to AHDB. Summer rain and the ability to irrigate appear to have saved many crops, which also had to survive the August heatwave. Yields for many are average, although there are some signs of heat damage, while recent rain has led to fears of the resurgence of blight, Cedric Porter reports for fginsight.com.
AHDB Potatoes noted rain has delayed lifting, with heavier land the most affected. A forecast interspersed with showers could mean a catchy harvest is in prospect and growers will not want a repeat of last year, when heavy rain meant that some crops were not harvested before Christmas, with a small area abandoned altogether. An average crop of 46 tons per hectare would deliver a total British crop of 5.474 million/t, which would be 300,000t or nearly 6% more than last year.
Strong prices are not cushioning the impact of tricky conditions. Recent free-buy prices have been at just over GBP110/t, according to AHDB. That compares to GBP175/t a year ago and is the fourth lowest early season price since 2000.
In the 21 seasons since the start of the century, the average early season price has been GBP 145/t. The all-average price, which includes contract values, is stronger at GBP175/t, only GBP8/t less than last year. There is a premium for quality with free-buy reds making GBP240/t, compared to GBP100/t for whites and GBP150/t for Maris Piper. Bagged chipping types are fetching about GBP125/t, less than half what they were a year ago.
While there may be no major issues with supply this season, demand remains a concern. Fresh potatoes fared well during lockdown, with sales in the 12 weeks to the middle of May up more than 20% compared to the same period in 2019, according to Kantar research figures for AHDB.
About 80% of fresh potato sales are in the retail sector, so it was not adversely affected by the shutting down of restaurants and pubs.
That cannot be said for processing potato demand. Retail sales of frozen chips were on the rise, but with up to 60% of processed sales normally directed towards the foodservice sector, general demand was down.
A surplus of potatoes on the continent meant June potato exports were two thirds lower than June 2019 at 7,325 tons, according to HMRC figures. Imports were 16% down at 27,075t. Frozen fry imports down 25% in the month at 40,425t because of reduced foodservice demand.
Despite hotter temperatures during the August heatwave impacting potatoes in the ground, prices remain depressed. Early season values are as low as EUR20/t (GBP18/t), because of a large carry-over of stocks from last season. The April 2021 futures price is currently at nearly EUR80/t (GBP72/t), suggesting a slight contraction of the market in coming months.