Mercosur can give fries exports a small boost

South America is estimated to have an annual turnover of 900.000 tons of fries, making it a major European export market for potato products. By 2025, the total export volume will increase by 7% compared to the previous year, and the Netherlands has benefited significantly from this. The four Mercosur countries (Argentina, Brazil, Uruguay, and Paraguay) collectively purchased 43% more fries. Belgium performed considerably less well, exporting almost a fifth fewer fries to the four destinations.

Rates and levies
Currently, EU exporters face import duties of 12% to 12,5% ​​in these four countries. Under the Mercosur agreement, these tariffs are currently being phased out. After ten years at the latest, they will be halved, and after fifteen years, the tariff will be 0%. 

It will therefore take many years for the French fry sector to truly benefit. Where the agreement could potentially have a more positive effect is through an open market between the two continents. South America has a history of anti-dumping duties on European fries. Colombia, for example, imposed one, which was subsequently annulled by the WTO. Brazil also has an anti-dumping duty in place until the end of this year. The Netherlands will be hit hardest by this, with a 41,4% duty. Germany will face 37%, Belgium 24,8%, and France 18%.

Delay
These tariffs were introduced in 2017 and extended in 2023 for a four-year period. It remains to be seen whether Brazil will seek another extension once the Mercosur agreement enters into force. That, too, remains uncertain. At the end of January, after two decades, a definitive agreement seemed to have finally been reached in the EU. Von der Leyen ultimately stumbled over the European Court of Justice. The Supreme Court must first give its opinion on the deal. That process is expected to take a year or two.

Meanwhile, the South American potato processing industry is developing rapidly. Lamb Weston opened a brand-new factory in Mar de Plata, Buenos Aires, in October 2025. Competitor McCain is working hard on a factory in Azará, Brazil, scheduled to be operational by mid-2027. Simplot already has a factory in Mendoza, Argentina, but announced a production expansion in December. And it's not just foreign giants that are targeting these countries. National player Bem Brasil, one of the largest processors in the country, processed 10% more last year than it did in 2024.

With its 210 million inhabitants, Brazil is the French fry capital of South America. By comparison, Argentina has between 46 and 47 million inhabitants. In 2024, Argentina exported a staggering 145.000 tons of fries to its neighbor (and 40.000 tons to Paraguay). Belgium supplied 96.000 tons, and the Netherlands supplied 42.000 tons.

Growing sector
A decade or more ago, South America was still heavily dependent on French fry imports, primarily from Europe. Now, the continent is increasingly self-sufficient. Investments in new and existing production facilities are ensuring this. In 2023, the total potato area amounted to a staggering 932.500 hectares, of which 17,39 million tons were harvested. The EU's export position is coming under further pressure. Moreover, there are more competitors. Egypt is a fairly large player, and China has also found its way to the continent. Finally, in 2025, the US will have exported some volume to the four Mercosur countries for the first time.

Whether countries like Argentina and Brazil will eventually be able to export globally remains to be seen. Demand is high on the continent itself, and competition is fierce. However, the positive impact of Mercosur is questionable. The benefits are relatively limited, especially considering the timeframe. By then, the market will most likely have evolved significantly.