The harvest is not in favor of the chips. The number of packages of popular snacks may decrease on store shelves due to a lack of raw materials. Less potatoes are harvested than last year. And this is typical not only for Russia, but also for many other countries - fast food producers will have to work hard in search of a free harvest. What does the coronavirus pandemic have to do with it?
Not enough potato chips! This is stated by the leading Russian manufacturers of crispy snacks. And what is, farmers strive to sell at a higher price. Both fears are true in their own way, says Alexei Plugov, head of the AB-Center, an expert-analytical portal for agribusiness. Now the harvesting of potatoes in our country is in full swing. Moreover, the market maintains a high level of prices.
PLUGOV: One might say, unprecedentedly tall. If last year at this time in the wholesale link the cost was 8-10 rubles per kilogram, now it is at the level of 20 rubles per kilogram. That is, the prices are 2 times higher than in that year.
The area under potatoes has decreased this year. That is why the harvest is less. But this is just one of the reasons, according to Alexei Plugov; the gross yield of this crop falls as a result for the second season in a row.
PLUGOV: It was late spring this year. Then, in summer, conditions were also not very favorable, and the yield is expected to be lower than last year, the harvest per unit area is even lower. There are also questions about the quality of the crop. Also, let's say, it's too early to sum up the results, but in general it is worse than last year: in 2019, the harvest of potatoes amounted to 7,5 million tons, in 2020 - 6,8 million tons. In 2021, we expect that collections will decrease by another million tons, and will be 5,8 million tons.
But these are summary figures, in which the lion's share is occupied by table varieties - what is sold in stores under the label “for cooking” and “for frying”. The varieties for the chips are called "industrial", says Viktor Kovalev, Development Director of the Potatosystem.ru portal, stores do not need them for nothing, people will not buy them.
KOVALYOV: The difference between table and potatoes for industrial processing is in the content of dry matter and starch. Accordingly, there is less of it in table potatoes - up to 16%, over 16% of starch is used for industrial processing.
The more starch, the worse the potato slices absorb oil during frying, which means that oil costs are reduced, and the chips themselves are less nutritious, they can be advertised almost as tasty and healthy food. Each consumer has his own knowledge in this regard. But the fact is in numbers: the coronavirus has sent many to remote work, and people have reduced trips to theaters, movies and restaurants. Films are now being watched more and more on laptops and tablets under a blanket and with a packet of chips in their hands. Their sales volumes increased during the pandemic in Russia by 20%. Of course, manufacturers immediately began to build new preparation and packaging lines. But they just do not have enough potatoes - this is what explains in reality the loud statements about the lack of raw materials. Because, says Viktor Kovalev, it is possible to build a plant in a year, but potatoes will not grow so quickly for him.
KOVALYOV: The point is that growing potatoes is a long-term program; today you cannot decide to buy seeds somewhere and grow them on an industrial scale. This is a whole work that goes from growing from the so-called meristem, growing from the cage of mini-tubers, the first field "super elite", to the first reproduction. This is a program up to 5 years. Therefore, it is, unfortunately, impossible to immediately decide that, here, let's grow potatoes for industrial processing.
We take a bucket of potatoes in the spring, plant them in the holes, wait 3 months and collect 4 buckets - all owners of summer cottages and natives of the countryside operate with this simple agronomic knowledge. But the industrial production of this culture is a little different, notes Viktor Kovalev, and is not at all so commonplace. To this day, many farms, having introduced seeds into the land, rely, for example, on natural watering.
KOVALYOV: Many people grow potatoes according to the old technology, without irrigation, and get a crop of 20-25 tons per hectare. And companies that grow irrigated potatoes know all the technology and grow 60 - 70 tons. The numbers, as you can see, differ significantly.
And even such efficient farms have no particular interest in the future to switch to the production of raw materials for chips. The prices on the market, Viktor Kovalev believes, will allow them to earn good money, which is called "with less effort."
KOVALYOV: 2020 and 2021 show that the cost of table potatoes is higher than the purchase cost for processing. Therefore, it is not economically feasible for farmers to grow potatoes for processing. They buy it fresh from him, store it is easier, and the implementation is much faster. Now the demand is quite good for table potatoes.
It will be possible to make final conclusions about the saturation of the chips industry with raw materials in November, when the harvesting of potatoes in Russia is over and it fills the storage bases. More distant estimates of prices generally look like this, according to Alexei Plugov.
PLUGOV: Every week 500 thousand tons are harvested - the most active phase of harvesting. Prices may roll back a little, go down. But there is a possibility that in the spring the price will be 30 rubles per kilogram in wholesale. That is, now it is 20, and in the spring it may be 30. Therefore, already in February, large quantities of potatoes will be actively imported to us - Egypt periodically covers its needs, then Pakistan and Iran.
Chips sales increased by 30%. The factories are short of raw materials. But these complaints are no longer from Russia. The picture is almost repeated in Switzerland. And here are the reports of farmers in northwestern Germany, Holland and Belgium: the yield from year to year is the same, but the area under potatoes has decreased. In addition, pest control costs have increased. Energy is becoming more expensive and storage will become more costly for the coming winter. And since the exchange prices for grain and rapeseed have jumped sharply, many farmers will switch to them in the spring - much more modest in cost.
There seems to be no good news about potatoes: "America hopes for a harvest in Idaho" - this is from the headlines of overseas industry portals a week ago. This state supplies a third of the potatoes to the US market. A couple of days ago, forecasts appeared - due to the summer drought, the harvest will decrease by 5%, and the quality will be clearly worse. What can we say, if in Belarus, in the midst of the potato harvest, plans were announced to import potatoes. For the first time in the entire independent history of the republic.