End-November stocks lowest since 2012

Friday, 7 February 2020

GB grower held potato stocks at the end of November 2019 are estimated at 2.88Mt, down 4% from last season and 11% below the five-year average (2014-2018). This comes despite an 182Kt increase in production from last season’s drought-hit crop and places the November stock figure at the lowest level since 2012.

Quality impacting drawdown?

The rate of drawdown was noticeably higher than last season with 2.2Mt, or 44% of this season’s crop, leaving grower ownership by the end of November. This is not particularly surprising given that the quality and storability of late lifted crops was questionable. With risk of breakdown and further deterioration in quality, many of these supplies were sold as quickly as possible.

However, in the short term we may see drawdown slow in the next set of stocks figures. Not all of the crop was out of the ground by the end of November and many are still attempting to lift where possible. While the quality of these crops is questionable, tight supplies have meant that processors are utilising as much of the available material as possible.

With freshly lifted supplies coming forward since November pressure on current stock levels may ease. Especially as the majority of the crop lifted over the past few months will need to be moved quickly.

Plenty of packing, short on frying material?

The stocks figures this year have placed packing supplies in stark contrast with other sectors. End November packing stocks have been estimated at 1.2Mt, an increase of 47Kt from last season and above levels in 2016 and 2015. This is not particularly surprising given that production of packing potatoes increased this year, with only limited unharvested area in both Scotland and the East of England, which make up c.60% of the GB packing area.

For other sectors, decreases have been seen across the board relative to levels last season. Stocks for the fresh bags and chipping market are currently estimated at 409Kt, a decline of 93Kt from 2018 and 23% below average (2015-2018).

Currently prices in the chipping market have stayed firm with growers holding onto best quality and early movement of any ‘at-risk’ stock. The lack of demand from fish and chip shops, following the portion cuts last season, continues to limit any price rises with a reduction in demand slightly offsetting tight supplies this season.

The processing and other ware category has also seen a decline to 892Kt, down 16Kt from last season. The processing sector has definitely been one of the worst hit with the wet weather causing fry colour issues in both late lifted and unharvested crops.

Growers are still trying to get these crops out of the ground and whether or not they will meet spec is uncertain at best. While a limited amount of these are able to meet frying spec, much of the rest is being repurposed into other processing. Problems arise in sectors such as crisping, where tight specifications mean that little, if any, of the crop currently being lifted is able to be used. Late-lifted crops are also causing problems, with an increase of rejections reported.

Where next?

The January stocks release will hopefully provide some insight into how much of the crop lifted in December and January has managed to offset low stocks in November. Most will be able to scrape through utilising imports and lower quality supplies this season. However, some sectors seem likely to fall short with alternative supplies of equivalent quality in limited supply.

Aidan Wright

Analyst

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