Alexey Krasilnikov, executive director of the Potato Union
THE CALENDAR YEAR IS ENDING, AND THIS IS A REASON TO DISCUSS THE RESULTS WITH WHICH THE INDUSTRY HAS COME TO THIS BORDER, AND THINKING ABOUT ITS IMPROVED PROSPECTS.
According to the operational information of the Ministry of Agriculture of Russia, as of November 17, 2021, the potato harvest in the organized sector of the country amounted to 6,6 million tons (6,8 million tons in 2020). The final results of the cleaning have not yet been summed up, but there will be no global changes in the data.
The result turned out to be lower than planned (the department's experts expected that the country would receive at least 7,15 million tons of potatoes), the main reason for the shortage is unfavorable weather conditions, recall that an emergency regime was introduced in 16 regions of Russia this year, which could not but affect the amount of harvest, the quality of potatoes, as well as the cost of production and the level of provision of certain territories with vegetables and potatoes.
PRICES
Potato prices this season maintained an upward trend even during the harvesting period of the main harvest, but by the beginning of November the upward movement had stopped, now we note even a slight decrease (by 2-3 rubles / kg), to an average level in the range of 27- RUB 30 / kg depending on the region. This fact is explained by the launch of lots that are not suitable for long-term storage or are not provided with storage facilities.
It is difficult to talk about future prospects, but we note that at the moment the Russian government has not canceled import duties on potatoes, and the volume of incoming imported product is still not very large, so in general the situation can be called favorable for domestic agricultural producers.
Let us devote a few words to other components of the "borscht set". The prices for white cabbage have remained at a high level for four weeks: in the Moscow region, products are sold at an average rate of 25 rubles / kg. If we talk about other regions, the minimum cost of cabbage is 20-22 rubles / kg, the maximum is 28-30 rubles / kg.
Carrots continue to rise in price, which is explained by the increased demand for them in the market. And the prices for table beets are growing. But for onion the price positions returned to the level of the last year (12-14 rubles / kg).
IMPORT
For the first time in the history of modern Russian potato growing, at the height of mass harvesting (September-October), potatoes from Iran appeared on the shelves of our stores. Moreover, we are not talking about small lots in the southern regions of the country, Iranian potatoes can be purchased in supermarkets in Moscow, and these products are quite competitive in terms of prices and quality with domestic ones.
Food potatoes are also imported to Russia from Belarus, but the volume of supplies is significantly lower than usual.
It is also noted that Ukrainian potatoes have entered our market (there were versions in the media about very probable routes for the supply of products through Belarus), but in small quantities: the country in the current season does not suffer from an overabundance of crops.
And, as always, the potato industry is concerned about the issue of importing potatoes from Egypt. It is known that Russia
for a long time it was the main buyer of Egyptian potatoes: half of the total crop (about 750 thousand tons) went to our stores. But there were periods when agricultural producers from this Arab republic made a choice in favor of the European market. In particular, the prices for potatoes in Germany are currently 30% higher than last year.
We can only guess how the circumstances will turn out this season.
SEEDS
Speaking about the reduction in the volume of potato harvest this year, we are talking not only about table products, but also about seeds. It is important to emphasize that the deficit of seed potatoes on the Russian market has been recorded for the second season in a row. On the one hand, this indicates an increase in demand: most of the market participants realized that more than 50% of success depends on the level of planting material. But
this is the only positive
aspect of this situation.
Last year, amid a shortage of seeds, their prices increased, and many farms postponed the renewal of reproductions until a better moment. This season, seed has been harvested even less and it has become even more expensive.
Seed potato crop failure is also observed in Europe this year. At the same time, the number of applications for European seeds from Russian
hand, according to operators, has grown two to three times. The increase is due to two factors: First, buyers fear that
will not receive the entire volume of the ordered; secondly, the need for varieties for fries and chips has increased (according to Potato
Union, in our country several large processing enterprises are preparing to open at once).
By the way, the latter fact confirms the emerging trend: in the short term, the share of table potatoes in the structure of crop rotations of Russian companies can be seriously reduced, since a significant part of producers will choose to work with processors - under short and medium term contracts. Formally, the results of this year contradict this conclusion, but they should still be classified as exceptional, this happens once every ten years.
The industry's course towards the development of the processing sector can only be supported by the Potato Union, due to the fact that the successful operation of processing enterprises will reduce the risks of potato overproduction on the market.
SUBSIDIES
In the 2021 season, the issue of supplying fruits and vegetables to the regions of the Far East is again topical. At the moment, experts of the Potato Union, on behalf of the Ministry of Agriculture of the Russian Federation, are working out proposals to stimulate the supply of vegetables and potatoes to this region.
Recall that, according to the current rules, only
agricultural producers of the Ural
and the Siberian federal districts. But the incoming volumes for
the region is not enough. In connection with
Thus, in order to increase the range of potential suppliers, we consider it necessary to expand the geography of the recipients of the subsidies to the scale of the whole of Russia.
Also, on the eve of the new season, we would like to draw the attention of agricultural producers to Russian potato varieties created as part of the implementation of the Federal Scientific and Technical Program for the Development of Agriculture for 2017-2025. Today there are already more than 20 of them and, in our opinion, this list contains very promising options that can compete with the market leaders.
The Russian government is interested in the wide promotion of varieties obtained under the FNTP, and for this purpose introduces a subsidy for the purchase of the corresponding seeds (compensation in the amount of 70% of direct costs).
The Ministry of Agriculture sent an explanatory letter to the regional departments of the department about a new type of support for agricultural producers, which also contains a list of documents required to receive compensation for costs (including for seeds that were already used in the season for planting the 2020 crop).
SEASON 2022
Focusing on the cost of potatoes on store shelves, many analysts conclude that the interest of agricultural producers in this crop will be higher next year, and the planting area will noticeably increase. But this is only one of the possible scenarios for the development of events, and not the most likely one.
Everyone who has been engaged in the industrial cultivation of potatoes for several years remember well how, after the hot 2010 in the country in 2011-2012, the area for this crop grew to the level of 400 thousand hectares, and none of the market participants.
That failure discouraged many from working at random.
Last year, we also had prerequisites for increasing the area for potatoes, but in fact, some small enterprises stopped working with crops altogether, and medium and large ones either kept the same volume or slightly increased it.
In the new season, administrative factors will be added to all factors stimulating production growth: the state is very interested in making potatoes and vegetables of the "borscht set" out of the category of expensive products. Regional bodies of the agro-industrial complex are already working in
this direction.
At the same time, it is obvious that not all agricultural organizations have the opportunity to simply increase the cultivation area: most have built a crop rotation system, purchased a set of equipment for a specific amount of work, and developed sales schemes. Expansion of any
directions will require a lot of effort and investment. Of course, the current season turned out to be profitable, but the prices for consumables for the next one did not remain in place (let's take, for example, mineral fertilizers: some items have tripled in price!).
Many farmers, commenting on the plans for planting, say bluntly that they will go to increase the area only if they consider this step very beneficial for the economy. And this "if" makes you doubt that the areas will really grow a lot.