It is well known that Russia wants to be self-sufficient and want to play a dominant role in the world market, and that ambition does not hide the country's ambitions either. There is now even a concrete objective from the Ministry of Agriculture: by 2025 the country must be self-sufficient in potatoes.
Russia has been in the top 3 of the largest potato producing countries in the world for years (after China and... India), with an annual production of over 20 million tons. The Russian Ministry of Agriculture has now also expressed an expectation about the harvest of table potatoes and seed potatoes. For the current season, the country expects a harvest of 7,55 million tons, which is slightly less than last season's 7,56 million tons. If all expectations come true, production in Russia will amount to 2025 million tons in 7,57. This will allow the country to easily achieve its target of being at least 95% self-sufficient.
This also means that the import of table potatoes and seed potatoes into Russia is becoming less and less necessary. Only 293.400 tonnes were imported in the period up to and including September, with Egypt being the largest supplier. Last season, in the same period, this amounted to 298.300 tons of table potatoes and seed potatoes. That trends is also visible in Dutch seed potato exports to Russia. In 2017, Dutch growers exported 5.187 tons of seed potatoes to Russia, but this has already dropped to 2019 tons in the 4.001 harvest. Moreover, growing production means that the Russians need to increase storage capacity. At the moment, the country can only store 4,5 million tons of product per year.
Export is taking steps upwards
This is also partly reflected in the Russian export figures of table potatoes and seed potatoes. Today, potato exports are making strong progress, although these figures are still lower than the import figure. Over the first 9 months of the year, Russia exported 254.800 tons of seed potatoes and table potatoes, which is 36% more than in the same period last season. In monetary terms, this is an increase of 37,5% to $30,3 million, compared to half in 2015. The main buyers of Russian seed potatoes are Azerbaijan, Kyrgyzstan, Kazakhstan and Serbia. The table potatoes are especially popular in Ukraine, Uzbekistan, Georgia and Moldova.
However, the Russian Agriculture Ministry still believes that it has a weak export position. This is because product from Russia only has a limited sales area. For example, potato exports have increased fivefold since 2014, but only thanks to the so-called 'Donbass' (a region in eastern Ukraine). 120.000 tons go there every year. Now that Ukraine itself has a decent harvest of table potatoes and seed potatoes, the Ukrainian cabinet is considering an import ban on Russian potatoes. And with the limited storage capacity of 4,5 million tons, this could have major consequences for the Russian potato market.
In any case, it is clear that the European market will not respond. A quarter of the world trade in potatoes (consumption and industry) takes place between 4 Western European countries: Belgium, Germany, France and the Netherlands. Mutual trade between all countries in the European Union even accounts for half of the total world trade in potatoes. In short: European countries have their own sales channels. In addition, the quality of Russian potatoes is far below European standards.
Opportunities in processing
The latter is something that the country wants to focus on, including by investing heavily in potato processing. Only 1,5 million tons of the potatoes produced are used for processing. The Russian ministry believes that this percentage should be increased considerably and refers to European statistics. In Belgium, for example, 85% is processed. Insiders are therefore calling for a state program to support processing. "This is necessary because the investment costs of equipment are quite high nowadays. The aim should be to double the processing and at least bring it to European level," they say.
Market analysts previously also predicted that potato processing in Russia will increase in the coming years takes flight. It therefore comes as no surprise that McCain will build a factory in Russia. Euromonitor International also reported that sales of potato products in Russian retail are growing by almost 10% and the main sales channel for fries, the catering industry, appears to be insatiable. The Russians imported around 2019 tons of processed potatoes from abroad in 100.000, mainly from the Netherlands. It remains to be seen whether this trade relationship will suffer from the construction of several of its own chip factories. It is clear that Russia is getting closer to the goal of becoming self-sufficient.
To achieve this, the country still has to overcome one concrete hurdle: investing in modern technologies to promote the quality and efficiency of cultivation. The average hectare yield in many regions now does not exceed 1 tons, with peaks of 22 tons. According to insiders, a lot of investments are needed to achieve further professionalization. But, with an annual potato production of more than 35 million tons and a consumption of 20 kilos per person per year, the Russians are well on their way to achieving their goal.