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Domestic market update - 02 April 2020

Thursday, 2 April 2020

Coronavirus sends demand in opposite directions

The past month (March) has been quite the rollercoaster for the country and the potato industry has been no exception. The first week of March remained relatively stable but from week two, traded volumes ramped up. In weeks two and three, overall trade seemed up, but this was heavily weighted to the retail sector and also the 25kg bags (ware) sector.

As the coronavirus situation escalated, so did the rules set out by the government. Many food service outlets were forced to close, along with schools and most hotels. Large events were also cancelled, adding to a reduction in demand for processed supplies. When chip shops were forced to shut their doors, the chipping market completely disappeared for most suppliers as only a few could offer a delivery service.

There were many reports of “panic buying” and keeping retailers stocked was increasingly difficult. Some consumers were also turning to farm shops and direct to growers for 25kg bags. Weeks two and three saw a huge upturn in this demand.

With chip shop demand pretty much ceased, some chipping supplies were being sold as ware to meet local demand. Also, some processing supplies were seeking new markets and traditionally non-packing varieties such as Markies were making their way onto supermarket shelves.

Free-buy prices for packing supplies saw a rise throughout the month, along with bags for ware prices. Some contracts were being brought forward to help with the supply of material into packhouses, but there was still significant demand for free-buy material.

Towards the end of the month, the packing trade did seem to ease a little. With many shoppers now well-supplied and stricter regulations in place at supermarkets regarding shopper activity, it is likely there will be a change in shopping behaviours. There is potential that frequency of shopping will drop but basket size may rise. Should retail demand return to a more normal level, the full effects of the loss of the food-service sector will really be felt.


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