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Expert Opinion: What could the coronavirus mean for the global potato industry?

The spread and fear of coronavirus has stepped up a gear this week, with more than 110 countries or territories reporting 129,000 cases and more than 4, 000 deaths between them, writes potato market analyst Cedric Porter in this week’s issue of World Potato Markets.

The virus is having an impact on the potato industry, Porter says. Some countries are reporting an increase in table potato sales as people stock up on essential goods, but processing potato prices, especially in Europe, have plunged on physical and futures markets.

The current crisis is being likened to the economic crisis which began in 2008. Fries weathered that crisis well. By the end of  2013 global exports of fries were 22.5% higher than in 2008 at 6.108 million tonnes – average growth of 4.2% a year.

Sales have continued to grow and are now at 8.194 million tonnes, 64.3% more than they were in 2008. The current crisis is a little different to the one in 2008. Then there were no physical restrictions on the shipment of products just a lack of finance. Also, that crisis was centred on North America and Europe, whereas this one has so far been focused on Asia and China in particular.

Fries can bounce-back from physical disruption quite quickly. A strike on the east coast of the US disrupted exports to the Asia Pacific region in 2014/15 but as soon as it was resolved sales returned to normal and have grown steadily since.

Although the majority of the world’s frozen fries are eaten out of home, and it is that sector which has been most impacted by the virus, they do have the advantage in being served in quick service restaurants where can diners can order takeaways, pick up meals in cars or have them delivered.

There is also the prospect of some disruption to the growing and processing of potatoes from the virus. If key farm staff are infected or need to self-isolate to prevent the spread of the virus at key times such as planting or lifting then that could reduce output.

Meanwhile, the infection of large numbers of staff could disrupt processing – the UK has estimated that in a worse-case scenario a fifth of the workforce could be away from work at any one time. Potatoes are not so vulnerable as other food products such as salads and dairy, so disruption to employees can be more easily managed.

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This is an edited version of an article in this week’s World Potato Marketsan essential resource on potato pricing, production and trade.
For a free three-week trial, contact editor Cedric Porter on cedric@supplyintelligence.co.uk, call +44 1892 543444 or see www.worldpotatomarkets.com

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