China is the world’s largest potato producer, accounting for roughly a quarter of worldwide fresh potato production. According to a USDA/GAIN report released yesterday, China’s 2018/19 fresh potato production is forecast lower at 94 million tons, a two-percent decrease from MY2017/18. This decrease is due to low potato prices which pushed Chinese farmers in the major production regions to replace potato acreage with corn.
In terms of processed potatoes, frozen french fry (FFF) production will jump to 290,000 tons in MY2018/19, a 15-percent year-on-year increase resulting from added FFF processing capacity. Conversely, China’s FFF imports in MY2018/19 are forecast to decrease 10 percent to 115,000 tons because of additional tariffs placed on U.S. FFF exports to China, reduced European supply, and growing domestic FFF production.
China’s MY2018/19 (September to August) fresh potato production is forecast at 94 million tons, a three-percent decrease from the estimated 97 million tons production in MY2017/18, due to a decline in planted acreage. In 2016 and 2017, a large number of Chinese farmers switched from growing corn to planting potatoes, pulses, and other smaller commodities. However, in MY2017/18, Chinese industry reported that abundant harvests led to low potato prices, spurring many farmers -especially in Northeast China- to shift planting area back into corn production in MY2018/19.
According to industry sources, the average wholesale price of fresh potatoes from January to April 2018 was 16 percent lower compared to the 2017 price. On the other hand, corn prices are expected to remain strong, due in part to new mandatory ethanol initiatives and decreased soybean imports.
China has four main potato producing zones. Sichuan, Gansu, Guizhou, Yunnan, and Inner Mongolia are the largest potato producing provinces in China, accounting for about 60 percent of China’s total fresh potato production.