News May 2019

US potato export sales trending up, but fears persist about ongoing trade wars and strong dollar

In a press release issued earlier today by Potatoes USA, it is said that U.S. potato exports of frozen, dehy and fresh have all posted modest gains through the first three quarters of the July 2018 – June 2019 marketing year.

Potatoes USA says that these increases reflect the ever-increasing international demand for potatoes and potato products. The impact of the very small 2018 crop in the EU is further increasing demand for U.S. products.

However, the organization warns that the ongoing trade wars and retaliatory tariffs have limited U.S. exports, as has the strong U.S. dollar. Strong domestic demand in the U.S. has also constrained available supplies for export.

The volume of Frozen exports to the world is up less than one percent. The 20% retaliatory tariff on U.S. fries entering Mexico has resulted in a 26% decline to what had become the second largest export market for the U.S.

The 10% retaliatory tariff on U.S. fries entering China has yet to create a decline to this market, but the additional 5% tariff set to be implemented and the recovery in EU supplies could result in declines in U.S. exports to China. Strong exports of fries to Japan (5%), Korea (9%) and other Asian (6%) markets have offset the losses to Mexico.

The volume of dehydrated potato exports is up 2%, driven by increases to non-traditional markets. This is an area where the short EU crop is providing new opportunities for U.S. exports, though tight supplies in the U.S. have limited the growth. Established markets such as China (-68%), Japan (-7%), Malaysia (-4%), and the Philippines (-44%) are all down.

However, increased exports to Europe (6%) and North (14%) and South America (149%) have made up for these losses.

Fresh potato exports are up 1%, led by increases to Mexico (7%), Canada (3%), Korea (33%) and Central America (17%).

Fresh potato exports are not just for table-stock, but also include potatoes destined for processing into chips or fries. Declines in exports to Japan (-29%), the Philippines (-15%) and Taiwan (-26%) have tempered the gains.

It is expected that exports to Canada will continue to grow after a 102% increase in March as stocks of potatoes for chipping and frozen products are well below normal for this time of the year.

Source: Potatoes USA press release