The South African potato industry have quashed rumours that prices for pockets of potatoes have skyrocketed over the festive season and will remain high. It said cases of high potato prices over Christmas were limited to isolated retail outlets and prices overall were fairly representative of market conditions.
Pieter van Zyl, the manager for industry information at SA, told Farmer’s Weekly that in the last six months of 2007 producer and consumer prices were only higher in the Western Cape. “Some 70% of Cape Town’s potatoes come from the Sandveld region, which is quite far inland, so consumers there had a transport premium added to the price of potatoes to cover costs,” explained Van Zyl. “This amounted to as much as R5/10kg bag of potatoes.”
Potatoes SA said there was a slight drop in potato yield in the 16 winter potato production areas. The longer, colder and wetter 2007 winter season had resulted in lower volumes being supplied to retailers in September and October last year, but that situation was short-lived. The organisation explained that potatoes are produced all year round in SA and that prices tend to be relatively stable barring cases of widespread disease or destructive weather. Van Zyl said that producer prices for potatoes during September and October peaked at R40/10kg bag, but that lasted only a week or two before the price stabilised again at an average of R27 to R28 a bag, for all potato classes at all markets, in November and December.
High prices a blip
Consumers should only have experienced a short-lived price increase because potato prices in retail outlets generally fluctuate with market prices. “There will always be retail outlets that add high margins,” said Van Zyl. “Recently, some retailers were asking as much as R60 for a 10kg bag of large potatoes. This is much higher than the average producer price.” The current average producer price for potatoes is R23 to R25/10kg bag and Potatoes SA said that price is likely to move sideways for the next few months.
“Potatoes SA keeps a close watch on producer prices versus retailer prices and has found that generally they fluctuate together as supply and demand dictate,” added Van Zyl. Prices might escalate later because of a slight decrease in plantings by farmers who have been financially hurt by drought conditions, but the good potato yields expected after recent good rains might counteract that effect. Potato crisp manufacturers are the only ones experiencing a potato shortage. Their favoured potato variety for making crisps was severely impacted by cold winter, so they’ve had to resort to using the next-best available variety. – Lloyd Phillips
