Tension in the Russian potato sector is rising

Spring is here in many parts Russia started relatively late. Many potatoes are grown in the area around the city of Bryansk, close to the Ukrainian border. Planting started here on average 3 weeks later, insiders say Boerenbusiness. The conditions are now ideal, with relatively high temperatures between 20 and 25 degrees.

Drought
Moisture in the soil is not yet a problem around Bryansk. If you go further south, the situation changes. Most rain falls in the west. Irrigation is possible, but not everywhere. From Voronezh-Lipetsk it becomes increasingly drier. This causes emergence problems for recently sown crops. Sugar beets, corn, soy and sunflowers are not yet in the ground.

It is difficult to draw firm conclusions about the consequences of a late spring. The old farmer's wisdom 'kilos grow in the summer' also applies here. "Last year the summer was relatively cold and with few hours of sunshine. The potato yields were poor then," says an insider. "It is now late to plant, but if a summer with lots of sun and regular showers follows, the yields will be much higher."

Racial shift
The opening of the large professional chip factory in Lipetsk was a big event at the end of April news. Owners Belaya Dacha and LWM can process 200.000 tons of product there. The largest customer is McDonalds, with 650 restaurants. The Russian Belaya Dacha group has a lot of agricultural land.

The required potatoes can partly be grown yourself and the rest is contracted from growers in the region. This is not immediately noticeable in the Russian market, insiders think. At most, existing growers will grow fewer table potatoes and switch to chip varieties.

Export figures
The recent export figures confirm how many fries Russia requires. Even with a large modern chip factory, the country remains an important player. In the last 12 months (until February), a good 120.000 tons of product were imported, an increase of 20% compared to the previous period. The most recent figures for January show an increase of 40%. In 2009, Russia imported 58.000 tons. So the quantity has already doubled.

The Netherlands is the main supplier of fries and other frozen potato products to Russia, with a volume of 50.000 tons in the 12-month period. This is followed by Poland with 40.000 tons and France with 13.000 tons. Arch-rival Belgium is positioned lower with 10.000 tons. The Netherlands has the great advantage that it can deliver fries by boat to the port of Saint Petersburg. These are then transported 1.400 kilometers across the country to Moscow.

football world cup
Export figures are only expected to increase in the coming months. The Football World Cup will start on June 14, spread over 11 Russian cities. Such events give a huge boost to consumption. This also applies to organizing the Olympic Games.

(Text continues below the image)Plants of potatoes in the Orenburg region. Photo: Meindert den Ouden

Egyptian import
Now that the storage season is coming to an end, the import of table potatoes is increasing. Due to the import ban, Europe has no longer been able to benefit from this since 2013. Most potatoes are brought from Egypt and China. A shortage of quality product has led to potato imports doubling this season. In fact, Egypt supplied almost twice as much product to Russia. At the beginning of March, total potato imports amounted to more than 560.000 tons. Partly because significantly more was imported in the first months of 2018.

Local supplies are often tight or of poor quality, leaving Russian growers with their product. The warm weather is not doing the storage potatoes any good. Wholesale prices for locally grown product are between €19 and €24 per 100 kilos. Imported potatoes are at the top of that range and are actually falling in price.

In addition to fries, an increasing import of table potatoes is also expected. In April and May the available stock is at its peak. The new harvest has not yet arrived, so the required volume is almost entirely filled with imported potatoes. A later spring strengthens that movement. Egypt benefits fully from this. Neighboring countries such as Belarus and Azerbaijan also supply potatoes.

Dutch consequences
With the import ban, the situation on the table potato market has become a 'far-from-us show'. However, Russia is pulling so hard on Egyptian supplies this season that there may be indirect consequences. For example, the country must reduce its deliveries to other countries to meet the increasing export pace.