Russia to Boost Potato Production in 2022 by Increasing sown areas

The Russian government will provide a set of support measures aimed at increasing production capacity. As a result, the projected potato production area will reach 298.7K hectares by the end of 2022, a 6.7% increase from the currently registered planting area.

Last year, Russia witnessed rainfall across the potato growing regions, resulting in affected potato crops and harvest volume reduction. The decrease in production created a shortage in the market that eventually resulted in an increase in domestic prices. To fulfill the domestic market, Russia was forced to increase its imports from different sources. However, the country had limited sources to import from due to different trade bans with traditional potato suppliers and was forced to turn to potato imports from non-traditional sources like Iran and Georgia.

Russia’s Potato Production Projection

The Ministry of Agriculture proposes to increase the area under potatoes by about 30,000 hectares and under vegetables by 15,000 hectares. Thus, according to the forecast of the Russian Ministry, potatoes will be planted on 298.7K hectares in 2022, for a 6.7% increase YoY, and open ground vegetables will be sown on 196.6K hectares for a 7.9% increase. To this end, the Russian government will provide support measures to increase support to increase production capacity, develop commodity distribution infrastructure, and increase storage capacity.

Increasing the production capacity for open field vegetables is the main task to ensure the country’s food security. Over the last five years, the harvest of open-ground vegetables in Russia has consistently surpassed 5M mt. Due to difficult weather conditions, about 5.2M mt of potatoes were harvested last year, over the 5M mt marked despite affected crops and harvest reduction. The Ministry forecast potato production to exceed 5.7M mt for 2022 with the 6.7% increase in planted areas and a continuous 4% yearly increase from then until achieving an approximated of 7M mt to fulfill national demand.

Over the past years, the profitability of the production of potatoes and vegetables in the open ground has been lower than that of cereals, oilseeds, and other crops. Previously, potatoes were not included in the list of agricultural crops that were subject to stimulating support. However, due to the recent production shortages, incentive measures such as subsidies to producers and technical support will be granted to motivate potato growers to increase their plantings.

Price Outlook for Potatoes in Russia

For the short term, potato prices in Russia are expected to continue on the same upward trend even in 2022 as expectations from the upcoming harvest remain low despite the planting area increase. Therefore, next season will be attractive for potato producers in terms of prices, as prices are set to remain about 40% to 50% higher than in 2020. According to Tridge’s Price Charts, on the last day of January, the average wholesale price for potatoes in Russia was USD 0.35/kg, just 0.6% higher than the previous year.

Last year’s shortage induced a hike in the price of potatoes and forced Russia to rely on imports from different countries. Additionally, Russia struggled to fulfill its demand due to several bans with different countries that are traditional potato suppliers to Russia, such as Egypt and the Netherlands. Thus, Russia was forced to turn to potato imports from non-traditional sources like Iran and Georgia, which supported the hike in prices.

Sources:

• Agroinvestor. "The Ministry of Agriculture predicts an increase in the production of vegetables and potatoes."
  
• East Fruit. "Russia to increase potato cultivation area by 6.7% in 2022."
  
• Ministry of Agriculture of the Russian Federation, "In 2022, sown areas under open field vegetables and potatoes will be increased in Russia".