Potato Weekly - 24 July 2020

Friday, 24 July 2020

At a glance

  • New-crop has held the lion’s share of crop movement in potato markets this week. Some old-crop movement continues, mostly for packing and processing jobs in smaller volumes. This old-crop movement should likely reduce to very negligible levels as we move into August, facing more new-crop supplies.
  • This week, lifting of chipping potatoes continues across the country. However, this is being met by limited demand which is dragging prices down, particularly so in the West.
  • Demand remains quite lacklustre across all sectors, which is not helping the market with new-crop maincrop nearing its final stages before lifting.

Alex Cook

Analyst

Packing

  • The majority of packing trade is taking place on contract now, limiting the need for free-buy material.
  • New-crop Reds supply should start to appear in the next week or so, as crops fast approach lifting dates.
  • New-crop salad potato movement is occurring for loose-skin supplies, but movement of set-skin supplies will start to pick up towards the start of August.
  • There is only minor movement of old-crop packing supplies as more packers switch to new-crop. As such, we are unable to provide old-crop prices this week. Old-crop supplies of packing quality are reportedly in very limited supply.
  • Retail demand is reportedly stable, with some specific demand picking up following in-store promotions.

Bags

  • Prices in the bags market have declined on the week, following continued newly available supply and overall muted demand.
  • Demand has suffered a slow return for consumers to hotels, restaurants and other food service outlets.
  • From the beginning of August, lockdown measures are likely to ease further, subject to transmission rates. There is hope this will stimulate an increase in footfall to food service outlets.
  • It is likely the return to ‘normal’ demand levels will be a slow process, heavily dependent on the coronavirus infection rate.
  • With relatively minor issues for lifting progress to date, prices could well remain pressured over the short to mid-term.

Processing

  • Processing requirement it generally well covered by old-crop contracted material, with limited reports of either new or old-crop free-buy purchases.
  • With restaurants and pubs still reportedly lacking in trade, demand for free-buy processing supplies could remain slow.
  • The summer seasonal break period for education sectors will further reduce processing demand, but September’s return could well provide an uplift.

Export

  • In contrast to last year, exports of fresh potatoes remain very quiet currently, with very few prices captured in this week’s survey.
  • Last year there was high demand for packing potatoes from Eastern Europe, due to the high prices of early potatoes on the continent.
  • Old-crop supplies on the continent remain at a hefty surplus, keeping European processing prices pressured for the short-term.
  • There was also good demand from European processors at this time last year, but the coronavirus pandemic has had similar knock-on effects to the processing trade on the continent as seen here in the UK.
  • Top quality fresh potato exports this year may well be affected by the large reduction in tourist demand for holiday destinations amid the coronavirus pandemic.

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