W38: Potato Update

In W38 in the potato landscape, Ukrainian growers exported record volumes of new potatoes in the first half of 2023 despite the ongoing conflict. Ukraine's total potato exports reached an unprecedented 19.8 thousand tons. The last time Ukraine exported over 10 thousand tons of potatoes in the first half of the year was in 2013 when exports amounted to 14.7 thousand tons. Comparatively, potato exports in the first six months of 2023 were 2.3 times higher than in 2022 and 3.8 times higher than the past five-year average. Ukrainian potato exports typically coincide with large domestic harvests, reflecting the nation's capacity to produce and export agricultural products even during challenging times. Moreover, Ukraine's potatoes are experiencing high exports due to low prices, with the wholesale price of potatoes at USD 0.16 per kilogram (kg), which is insufficient to cover the production costs.

Potato worms, also known as Elateridi, posed a significant threat to Italy's potato crops, with infestations growing rapidly in some regions. National Union of Associations of Potato Producers (UNAPA) president predicts that the losses in 2023 will surpass those of the previous year due to water damage and pest-related issues. Floods and heavy spring rains in the Romagna region have exacerbated the spread of wireworms, affecting the quality and quantity of potato harvests. Despite the potato crops' good quality, losses could amount to 20% to 25% of the harvest. The demand for potatoes remains high despite the price increases exceeding inflation rates and ongoing supply challenges, with the cost of potato bags increasing by 19% annually in Aug-23 and the price index at origin increasing by 22% in 2022.

On the other hand, the Russian government has signed a bill restricting the import of nine agricultural crops from unfriendly countries, including potatoes. The new regulation will come into effect on October 1, and the Ministry of Agriculture expects domestic breeders to work on import substitution of seeds. Russian farmers heavily depend on imported seeds, with sugar beet seeds accounting for only 3% of total seeding and potatoes at 9%. The government has been discussing the need to reduce dependence on imported seeds for several years, and the level of self-sufficiency in seeds for main agricultural crops in Russia is currently at 60.3%, while the Food Security Doctrine's threshold is 75%. Furthermore, Vedomosti reports a decline in Russian prices for fresh-harvested potatoes, with potato prices standing at USD 0.20 per kilogram (RUB 19/kg) at the end of Aug-23, a 27% month-on-month (MoM) decrease and a 52% YoY decline. The Potato Union's head, Tatyana Gubina, attributed the decrease to the traditionally rising prices in October due to excess stock sales.

Lastly, the United States Department of Agriculture (USDA) Animal and Plant Health Inspection Service will hold technical discussions on plant health with Japanese counterparts from September 25 to 29. The National Potato Council CEO will advocate for securing market access for all United States (US) fresh potatoes in Japan, the second-largest market for US potatoes. Although the US has been exporting chipping potatoes to Japan since 2006, the broader market for fresh potatoes, including table stock potatoes, remains untapped. If fully opened, this could lead to an additional USD 150 to 200 million in annual exports for the US potato industry.

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