Wholesale prices for potatoes have plummeted by 41% since mid-2011 and are now 30% lower than they were this time last year.
The average weekly price for British potatoes stood at £117.12 per tonne this week compared with £197.4 per tonne at the start of the 2011/12 potato season in July and £165.56 per tonne in January 2011 [AHDB].
Many potato products have fallen in price over the past 12 months - 1kg of loose baking potatoes, for example, has gone from an average of £1.37 to an average of £1.25 in the big four over the past year [BrandView.co.uk].
Prices are down from last year’s record highs because, at an estimated 6.3 million tonnes, this season’s UK potato supply is about 1.2% bigger than it was in 2010/11, and yields have been the highest since 2002, according to the AHDB.
“The ex-farm prices we saw in 2010/11 were the highest prices for more than a decade,” said AHDB senior analyst Jim Davies. “This season, prices are tracking between 2008 and 2009.”
The high potato prices were exacerbated last season by problems in key producing countries in Europe, such as Belgium, the Netherlands, France and Germany, which suffered poor yields, driving up prices across Europe.
Poor potato crops in Russia also opened up export opportunities for British growers, increasing competition for British-grown potatoes.
This year, however, aggressive competition between the retailers has helped reduce potato prices, according to NFU potato board chairman Allan Stevenson. “The supermarkets have been trying to get prices as low as possible and have been opportunistic in responding to the lower prices seen in the market,” he said. “Any weakness in the market tends to find its way from wholesale to retail.”
Stevenson added that he did not expect potato wholesale prices to rise again until the next harvest, in April.
Commodity prices
It’s a tale of opposing fates for coffee and tea at the moment - robusta prices have dropped from the highs of early 2011 as Sri Lankan tea has moved in the opposite direction.
Prices for robusta coffee have dropped by 6.9% month-on-month, following encouraging signs for the crop in Vietnam and better-than-expected forecasts for the higher-quality Arabica coffee in Brazil. Meanwhile, Sri Lankan tea prices have risen 9.7% over the past month, as buying interest from Middle Eastern countries has perked up.
Maize prices have also risen sharply over the past month due to lower forecasts for the South American crop. The news sent feed wheat prices up too, as the commodity is considered a substitute by buyers.
Guy Montague-Jones
Prices digest
Orange juice: Orange juice futures have shot up as a result of a pesticide scare involving Brazilian orange juice concentrate. US food regulator the FDA said it was carrying out tests after low levels of carbendazim - a pesticide banned in the USA - were found in Brazilian imports.
Cereal: Morocco has held national prayers for rain for the first time since 2007. The country is one of the biggest cereal importers and concerns are rising about its domestic grain harvest.
Rice: Exports of rice from India, the world’s second-largest producer, are expected to double this year following a record crop. A three-year ban on rice exports came to an end in September.
Trading: Commodities trader Cargill has reported an 88% year-on-year drop in earnings, from $832m to $100m, for the quarter to 30 November. It explained the drop was down to commodities markets being driven by political uncertainty, and a poor performance in the sugar market.
Julia Glotz
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