After a price rally of more than a 100% increase over the last year, the spud prices in South Africa (SA) have decreased in recent weeks, down to approximately USD6.85 per 10-kilogram bag.
Both the element of frost in Limpopo, which is a significant SA potato-producing area, backed up by adverse weather conditions earlier in the year have contributed to lower output.
“What made things a little worse this year is the fact that we had very adverse weather conditions in January specifically, which was the major planting time for these specific production regions. Part of production happens from January through to June / July and then the harvest starts from May through to August and they had managed to lift more potatoes earlier in the season, but the latter part of the season didn’t have the potato volumes expected,” the chief executive of Potatoes SA, Willie Jacobs, said, cited by SABCNews.
An agricultural economist at Amtrends, Dr. Johny Van der Merwe, added that due to high cultivars volumes entering into the market, supported by the latest heatwave that SA had in the past couple of days can lead to lower potato quality on the markets and uphold high prices.
“The potatoes don’t respond well to those significant-high temperatures above the 40-degree mark that we saw into the northern areas of South Africa and we can expect, therefore, slightly lower quality of potatoes as well,” Van der Merwe mentioned.
According to his expert’s views, these dynamics will likely see potato prices come under even more pressure. But the industry says it sees continued solid demand for its crop.
“I think on the demand side, which is becoming all the more obvious, is that there’s definitely. I don’t exactly know what the reason is for that but there is an increased demand for potatoes specifically. Whether it’s the other starch-related products that are also high in price like typically the maize price has a large influence on that,” says Jacobs.
Jacobs also expects potato demand to go through the roof on account of the festive season, more so with the relaxation of COVID-19 measures and the ramp-up in vaccinations, allowing for people to socialize much more than before.
Despite this positive expectation, input costs are expected to rise anywhere between 30 and 40% for the agricultural sector.
“But I think it will be more worrisome for specifically potato farmers, as the inputs are much higher per hectare for potatoes, so I think the increasing fuel prices, as we’re expecting, will increase now with the higher oil prices, so that will have a significant effect. Fertilizer prices increased drastically in the last six months and potatoes use a lot of those inputs per hectare, so it’s very intensive,” Van der Merwe concluded.
