In the last 10 months to the end of October, Potato SA said there were 17 percent fewer 10kg bags of potatoes sold on national fresh produce markets. The reason for the decline is that prices are 77 percent higher year on year, as compared with the same period last year.

The four biggest fresh produce markets have confirmed that a 10kg bag of potatoes costs more this year as compared with a year ago. In Johannesburg a 10kg bag of potatoes costs R46.13, Pretoria R45.88, and Cape Town R42.82, as at November 9 figures.

“It is true that prices are much higher when you compare to the same period in 2015 but we are seeing a slight decline in potato prices. However, the overall potato production is lower than last year. The farmers were forced to cut back on plantations as the drought started to bite,” said Wandile Sihlobo, a senior agricultural economist at the Agricultural Business Chamber (Agbiz).

The update report from Agbiz on Friday revealed that the prices have really been coming down as compared with prices charged earlier this year.

“The South African potatoes market saw substantial losses of 7.62 percent from the previous day’s session (Thursday), closing at R39.75 per bag (of 10kg). This was largely on the back of higher stock levels which were seen at 949 052 bags at the start of the session (up by 16 percent from the previous day’s level). Moreover, during the session the market saw an increase in deliveries, which led to a 15 percent gain in daily stock levels to 1 092 159 bags,” Sihlobo said.

Decline expected

Paul Makube, a senior agricultural economist at FNB, said it was true that prices were high during the year. “We saw less potato plantations as experienced by the other commodities this year as the drought continued to cause havoc in the agricultural sector. As a result it was expensive to buy a bag of potatoes. However, we might see an improvement in the 2016/17 season as the summer rains are starting to come,” he said.

Meanwhile Agbiz weekly report reveal that overall the South Africa potatoes market lost ground this week owing to higher stock levels which were seen at 1 092 159 bags (10kg bags) at the start of yesterday’s session.

More specifically, potatoes prices were down by 14 percent from the level seen on Thursday last week, closing at R39.80 per 10kg bag.

Towards the close on Thursday’s trade session the market saw an increase in deliveries which led to an uptick in daily stock levels to 1 263 725 bags, up by 20 percent from the same period last week. Overall, in the Agbiz report the economists anticipate a bearish movement in South Africa's potato prices over the medium term, as increasing domestic supplies on the back of the ongoing harvest process continues to underpin the market.

“That said, we remain cautious that consumer demand could also lead to short-term volatility in the market,” the economists noted.

“Like I said before, the prices are starting to come down, which is a good sign for the industry. Prices are still up a bit as compared to year on year because of the aftermath of the drought conditions. But the situation is improving as compared to the high prices we saw early in the year. We are seeing a better harvest of potatoes as compared to the previous months,” Sihlobo said.

SUNDAY INDEPENDENT