Rise in spud sowings sparks price fears
FIRST estimates show a big rise in the area of potatoes in the ground, prompting fears of further depressed prices.
Sowings are up 6% to 145,062ha, according to the British Potato Council – the biggest area since 1996.
The news comes at a time when prices are already in the doldrums, with last weeks average ex-farm level dropping nearly £5 to £77/t. That compares with £136/t this time last year.
"Obviously a disaster," says Melvyn Wyer of Cornish Potatoes Ludgvan, pointing out that growers increased acreages on the back of last seasons good returns in this, the second quota-free year.
Slow lifting rates are also a concern, he adds. BPC data shows cumulative clearings of 14,250ha (35,210 acres) by the end of last week – more than 3000ha (7410 acres) behind 12 months ago. "Thats all got to come," says Mr Wyer.
But Robin Barker, a grower at West Lilling, York, is more optimistic. "The market feels to me as if it is in balance." First estimates may not be right and the extra 6% could soon be lost in lower yields, he says.
The people selling now are the ones who have grown on-spec, perhaps with no storage and less marketing experience than the well-established operators, adds Mr Barker. "Price-takers rather than price-makers."
But the market could become more volatile, he suggests. "A lot of people who planted on-spec will lose money and, if they do, they will not plant next year. Then, if theres a drought, therell be a shortage."
Stewart Downing of Greenvale AP also doubts whether the 6% rise in area will equate to a 6% rise in yield. There may also be higher wastage than last year because of the weather and the widespread use of farm-saved seed.
"One of my anxieties is that we may see a lot of import pressures in certain sectors, particularly processing. But Im anticipating a relatively steady market."
The 6% rise is less than some people were expecting, according to BPCs Rob Burrow. He says the biggest expansion was seen among growers with between 16ha (40 acres) and 100ha (247 acres) who increased area 9%.
Futures, meanwhile, were at £64.50/t for April delivery early this week – the lowest-ever at this time of year. "It cant get a lot cheaper than it is," says one futures expert. "Everything bearish that could have happened to the market has." *