Potato prices are on the rise Mzansi, and according to industry experts, the increase has caused relief for producers and strain for consumers. At the crux of it all, the rise in prices is blamed on the country’s continuous rolling blackouts and high input and fuel costs.
Relief for farmers
CT van der Merwe, a potato farmer in Dendron, Limpopo, explained to Food For Mzansi that the current prices are helping farmers a bit because last year was a catastrophe with the low prices.
“We experienced huge losses last year, and currently the increase in prices is still a struggle. The prices are better, but they are still not as huge an increase as the input costs. Luckily, we are at least making a profit and will survive another year to plant again.
“The effect of the rise in prices, in the long term, is still not keeping up with the inflation and the increase in production. And currently, as they are there, on average there is a 100% increase,” he added.
Uncertainties loom large
Van der Merwe explained that the increase in costs rose about 200 to 300%, but with the uncertainties regarding load shedding and the increase in fuel prices, the increase in labour costs and fertilisers, and the weakening of the rand influenced buying all-out tools for production.
“The prices are still not as high as they should be to cover input costs, but luckily farmers are improving their yields and production, which leads them to a lower break-even price.
“There is a challenge of supply. Farmers don’t want to take the risk with the higher input costs to plant if they’re not sure if they will be able to get a successful yield with the load shedding and uncertainty of rising inputs. I would say these are the reasons for lower production,” he said.
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Consumers affected negatively
Meanwhile, Limpopo potato farmer Phophi Raletjela said that the rise in potato prices might be beneficial for farmers, but it is a challenge for consumers. He clarified that farmers sell potatoes at a more affordable price to markets, but the prices increase from the market point of view make them more expensive.
“As producers from the base of the value chain, potato prices are not unaffordable. But traders are making a lot of profit.
“When you look at the cost of production, we are not making a lot of profit compared to the traders that buy a bag of potatoes with a price of R80 to R90 and sell it at R200. Potatoes are not made expensive by farmers, but mainly by the middleman,” he said.
Having the same sentiments as Van Der Merwe, Raletjela believes the rising prices are profitable, adding that they make farmers want to produce more because of the good prices.
Making up lost ground
“Our business is improving a great deal and we can make up lost ground from last year when we worked at a loss. So this is an opportunity to recover.
“A lot of farmers went under last year and those that planted had to reduce their planting hectares because of financial problems that were influenced by high input costs and the inconsistent electricity,” Raletjela said.
“Everyone was concerned because we were not able to predict yield so we had to plant consecutively, but even if the situation went to stage six you would be able to irrigate. But, as a result, there was less production and less supply to the market, which led to the price increase,” he explained.
Farmers and pricing
According to Potato SA communications manager Hanrie Greeber, it is important to note that farmers have no control over pricing. She added that prices are determined by fresh produce markets, responding to market dynamics like supply and demand, and are influenced by seasonal variations, product availability, and grading.
“One of the primary factors contributing to the price increase is the significant impact of load shedding on the industry, which has hindered farmers from maintaining consistent irrigation practices. Consequently, they’ve had to scale back their usual produce planting,” she said.
Greebe explained that this challenge has been further exacerbated by escalating input costs like fertiliser, linked to current geopolitical factors.
Additionally, she added, in the past year other commodities have displayed higher profitability than potatoes, prompting many farmers to reduce their potato cultivation. Furthermore, specific regions have encountered reduced yields, compounding the overall issue.
“But there is some good news! In the coming months, we’re looking forward to a notable boost in production from the Limpopo province. This optimistic outlook follows a less-than-ideal growing season in the region due to unusually cold weather during the previous harvest,” she said.
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