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Domestic market update - 01 May 2020

Friday, 1 May 2020

Some signs of recovery across potato markets

The closure of the UK food service industry has continued to weigh heavily on the potato industry and trade. However, we have seen small signs of recovery towards the latter part of April. The start of the month was mainly contracted movement with very little, if any, free-buy trade in chipping and processing markets. Since then, chipping markets have reported a slight uptick in activity. Demand in packing markets is reportedly around “normal” for the month of April.

The opening couple of weeks of April saw subdued levels of free-buy trade for all sectors, in particular chipping markets that largely ceased. Packing markets made use of contracted material where possible and as a result, free-buy prices eased off from March highs. Demand increased slightly as retailers were able to move purchased supplies held from mid-March.

As April progressed, a number of chip shops have reportedly opened whilst adhering to social distancing regulations. A small percentage of food service outlets have also opened, for takeaway services only. With consumer demand present, some potato supply concerns could be alleviated if additional numbers of takeaway providers come back on line, as some are planning. Chip shops in urban areas have seen an uptick in demand from take-out apps and websites. However, a lack of tourism in coastal areas has meant chipping demand in these areas has been relatively subdued.

With packing markets the main demand source for potatoes currently, we have seen instances of chipping and frying material moving for packing orders. This mostly affected the lower end of the packing market and could continue for the foreseeable period. With schools and universities remaining closed, it has meant some processing markets have been largely operating using contracted or own supplies.

With much brighter weather over most of the month, many growers were able to get out and get ahead on planting schedules. Warmer soil temperatures this month have meant conditions were reportedly ‘close to perfect’. The rainfall this week will help to ease some concerns around soil moisture levels that developed from a lack of rainfall earlier this month. Some growers in Eastern and Southern regions are reportedly approaching the end of their planting programmes.

Our retail tracker for potatoes tracks shopping behaviour on a weekly basis. In the week ending 26 April, sales of fresh potato saw volumes increase (+33%) compared to the same week last year. Also, frozen potato product sales were up (+20%) year-on-year. This is likely expected as consumers seek to secure long-term food security during the current lock-down.

 

 

 

 

Alex Cook

Trainee Analyst

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