Farmer's Weekly (South Africa)
COVID-19 plays havoc with potato demand and prices
The impact of the coronavirus disease (COVID-19) pandemic on South Africa’s potato industry was evident in the lower volumes sold on fresh produce markets during both April and May, despite “normal” volumes being supplied.
This was according to André Jooste, CEO of Potatoes South Africa, who said that from January to March, sales volumes were higher than a year ago, but fell sharply during April and May, which resulted in significant downward pressure on prices.
“The average price for all classes on all markets were below break-even point for producers.”
Commenting on the closure of restaurants and fast-food outlets during levels 4 and 5 of the national lockdown periods, a sector from which there was strong demand for potatoes, he said: “Their closure meant that this market outlet was closed.
“The informal trade was also disrupted since no open-air food sales were allowed, and hence an important market was not able to procure potatoes on fresh produce markets.”
He said, in addition, that consumers were also under financial pressure, which constrained their buying power. “The reopening of restaurants should bring stronger demand.”
Jooste said statistics indicated that the average price of Class 1 medium potatoes (45% of all potatoes sold) had been levelling out since the middle of January.
“Prices of Class 1 large [potatoes], [making up] about 20% of total sales, dropped lower than Class 1 medium [potatoes] for the first time in the first week of lockdown.”
He added that when restaurants, fast-food outlets, as well as other tourism-related businesses were allowed to operate at full capacity again, the demand for Class 1 large and other sizes of potatoes could have a positive effect on average prices.
“[In the second week of the Level 3 lockdown period], Class 1 large [potatoes] started to realise price premiums above medium potatoes again.”
With regard to this year’s production, Jooste said 60% of the potato crop had been planted, and the harvest outlook in the different regions looked “normal”, with an expected crop of 250 million, 10kg bags of potatoes.
JF van der Merwe, chairperson for Potatoes South Africa and a potato farmer near Christiana in North West, said the restriction on the number of farmworkers that could be transported at any one time had resulted in an increased cost of transportation.
“[However,] it is still too early to say how big the impact of the pandemic will be [on producers in the sector].” – Pieter Dempsey
over 94 300t], which is almost 14% lower than the previous season.”
At just over 69 000ha, the area under production was only marginally smaller than last year’s almost 69 500ha. Market prices were looking favourable so far, with oilseed prices in general being higher than they were last year, Spammer said. – Glenneis Kriel