The fresh chipping sector makes up c.12% of total potato production in Great Britain. The market follows season trends with demand driven by chip shop footfall throughout the year, according to AHDB’s Aidan Wright.
While most of the crop is utilised domestically a steady stream of exports to the Republic of Ireland (ROI) provides an underlying support to the market, he says.
Wright points out that the UK exports around 55Kt of fresh potatoes to ROI each season, with monthly exports steady at c.4Kt. Trade codes do not allow us to tell the difference between chipping potatoes and other fresh potatoes. “This being said, anecdotally we are told that most of these are chipping potatoes grown in the East of England.”
Barriers to trade
- Non-tariff barriers – the UK will be unable to export fresh potatoes into the EUuntil the UK is granted third country equivalency. A full explanation of non-tariff barriers can be found here.
- Tariff barriers – fresh potatoes subject to an 11.5% tariff once exports resume, assuming no trade deal is in place.
Day one impacts
Once the UK has left the EU exports of chipping potatoes to ROI will cease until an agreement with Brussels is reached on phytosanitary regulations.
Realistically, this issue could take some time to reach a conclusion. Each month it remains unresolved an increasing volume of chipping potatoes will need to find a home in a domestic market, in which demand looks muted at best.
The 11.5% tariff is unlikely to be passed onto customers in ROI, given that cheaper European alternatives are available. This means that it is likely that the cost will end up hitting ex-farm prices, as customers are only willing to pay so much for quality.
There are also some reports that growers in ROI have expanded their chipping area this season. Should this continue then we could see UK imports being displaced by increasing domestic supply early in the season. In the short term a lack of investment in high quality frying stores means that imports will still be required in the latter half of the season.
Longer term a dwindling export market and smaller chip shop portions may hit demand in the chipping market. As such we may need to see a decrease in the UK chipping area to re-align supply and demand over the coming years.