Mzansi’s growers have raised the alarm about cheap potato imports potentially headed our way, and appeal to government to act proactively and temporarily pause imports from Europe.
With global supply chains severely disrupted due to the covid-19 pandemic, there is a surplus of frozen and processed potato products in Europe which they are scrambling to get rid of, says Potatoes SA CEO, André Jooste.
If those products end up as cheap imports in South Africa, that would severely disrupt the local industry, where potato processors already sit with a backlog of processed potato products due to the months-long lockdown on restaurants and the hospitality industry.
Other countries that have also expressed their concern about the EU potato imports include the United States, Australia and New Zealand.
Jooste says the industry is especially concerned about possible surge of imports from the EU headed to SA and want government to put measures in place to prevent injury to the local industry.
He says a sudden surge in cheap potato imports could negatively affect not only local farmers, but also the processing market and informal sector, he says.
“We are developing long-term supply chains into the processing sector. If there’s a sudden surge in cheap or low-priced imports, local processing facilities can’t compete with it,” Jooste says.
He explains this puts the farmer and processor supply chain in danger and will negatively impact the development of the potato processing value chain. Farmers will then rather produce potatoes for the table potato market, resulting in a higher supply within that market.
Alternatively, Jooste says farmers will opt to produce other products putting job opportunities in danger.
According to Jooste, “A higher supply in the table potato market then puts pressure on table potato prices. So, you see, it holds negative affects for both the processing sector as well as the table potato sector.”
The primary potato industry employs between 50 000 and 60 000 people with a strong economic impact on many rural towns. The processing industry employs between 6 000 and 10 000 people.
The processing sector was already constrained during the early stages of covid-19 lockdown levels when it couldn’t supply restaurants that were closed for trade. This resulted in huge stock pileups at processing facilities.
“Huge costs were incurred to store raw and processed products. If you have products in storage as a result of these extraordinary circumstances, you need to be able to work it away as marketing channels open up,” Jooste explains.
According to Jooste, the current situation also poses challenges over the next few months where processors also buy in the spot market. He says, as a result of the impacts of covid-19, such procurement will be disrupted, especially where cheap imports replace locally produced potatoes.
“We have to protect our food sector,” Jooste says. “Where we have the ability to produce a product locally, we must do so. It’s important to protect the industry as far as possible and shield it from disruptions in the world market.”
He says they are simply asking government to be cognizant of the local industry which took significant strain during lockdown levels five and four.
“We are asking them to take that into account when there is the possibility of cheap imports coming into the country. It is important for a country to protect its farming sector from these types of disruptions.
“Let’s look at the trade tools in our toolbox in order shield our industries and protect the many households dependent on the agricultural and agro-processing industry,” Jooste says.