Alexey Krasilnikov, executive director of the Potato Union
Based on the data coming from the regions, we can assume that the volume of potatoes in the Russian industrial sector will be at least 7 million tons. But the final results will be summed up by the end of autumn, after the harvest is completed.
REDUCED AREA, INCREASED YIELD
In the previous review, published in early June, when potato planting in a number of regions was still ongoing, we assumed, guided by reports from the regions and the forecast of the Ministry of Agriculture of the Russian Federation, that the area of cultivation of this crop in the industrial sector will increase this year. But expectations did not come true: according to Rosstat, 2020 thousand hectares were allocated for potatoes in 280,8: thus, agricultural organizations reduced the area by 9,1%, peasant farms - by 4,6%. Let me remind you that in 2019, potatoes were grown on an area of 302,3 thousand hectares.
It is premature to talk about the results of the season in August. So far, we can only note that the cleaning has begun and is proceeding at a good pace. According to statistics from the Ministry of Agriculture of the Russian Federation, as of August 20, potatoes in agricultural enterprises and peasant (farm) farms were harvested from an area of 24,2 thousand hectares, or 8,6% of the sown area, 626,8 thousand tons were dug up with a yield of 259,5 centners / ha. The figures are close to the results of the previous year for the same date. In general, everything is going well, and the average yield level is even higher compared to last year (although this data will certainly be corrected after the harvest of later varieties).
The highest achievements in terms of productivity are currently shown by the Stavropol region - 367 centners / ha (35 centners more than last year). The Oryol region is in second position - 357 c / ha (but a year earlier it was 417 c / ha). If we talk about the main "potato" regions, it is worth highlighting the Astrakhan region - 340 c / ha (+40 centners compared to last year's result), Samara - 300 c / ha (200 c / ha in 2019), Tula - 255 c / ha (251 c / ha in 2019) of the region. The Volgograd Region showed a good result - 285 c / ha (266 c / ha in 2019). A slight decrease was noted in the Tyumen region - 286 c / ha (299 c / ha in 2019). Low yields are currently recorded in the Kirov, Pskov, Leningrad, Novgorod regions, which is explained by difficult weather conditions in these regions.
A few words should be said about the weather conditions of the season. Summer turned out to be difficult, especially for the Urals, Siberia and the Far East, affected by drought. In a number of regions (certain areas of the Novosibirsk, Chelyabinsk regions, Altai Territory), an emergency regime was declared. The European part of Russia had its own problems: for example, the northern part of the Moscow region, a number of regions of the Northwestern Federal District suffered from excessive precipitation. In this regard, the costs of plant protection products rose sharply, it was necessary to fight against bacteriosis, and late blight caused damage to many farms. It is already clear that waterlogging will affect not only the harvest volumes, but also the quality of table and seed potatoes.
Unfortunately, I cannot yet single out positive trends for agricultural producers. At the moment, the price level corresponds to the indicators of the previous year, and in some regions it is 7-10% lower than these indicators.
SUPPLY OF POTATOES TO THE REGIONS OF THE FAR EAST
The Potato Union expresses concern over the situation in the Far East. At the moment, the regions belonging to this part of the country do not produce potatoes and vegetables in the amount necessary for self-sufficiency. Most of the crop production is purchased in China (many remember that the closure of the borders this spring immediately led to a shortage and a frantic rise in prices in local markets). At the same time, industry experts note that the path of Chinese potatoes to Russia may be blocked not only because of the coronavirus: this season, several attempts have already been recorded to import shipments of potatoes infected with brown rot into our country. Rosselkhoznadzor at any time can start working with the Celestial Empire according to the Egyptian scenario (that is, to prohibit supplies from specific farms and regions).
Of course, Russia has enough of its own potatoes, and at the moment the Ministry of Agriculture is working out the issues of allocating funds to compensate for the costs of organizing railway transportation to agricultural producers who will supply potatoes and vegetables to the Far East. But it is assumed that only the agrarians of the Ural and Siberian federal districts will participate in this process, that is, just those regions that have suffered the most from the drought this year. The Potato Union proposed adding the producers of the Volga and Central Federal Districts to the list of suppliers, but so far this idea has not been supported by the department.
Representatives of Russian Railways are also skeptical about the prospects for deliveries of potatoes and vegetables to the Far Eastern Federal District: it is obvious that the trains will go back across half the country without cargo. In general, in this case there are still more questions than answers.
EXPORT AND IMPORT OF POTATO
We all see what a difficult situation the Republic of Belarus is in now. It is difficult to imagine how events will develop further, but we cannot rule out the likelihood of a decrease in the volume (or complete cessation) of potato supplies from this country. I would like to note that we are talking about a significant amount: according to the calculations of the Potato Union, about 500 thousand tons of Belarusian potatoes are supplied to Russia annually. On the one hand, the release of such a niche in the market can be assessed as a positive trend for Russian agricultural producers, but let's not forget that the supply of seed potatoes of Belarusian varieties, which are quite popular in our country, may also stop. In addition, speaking about Belarus, we are talking not only about imports, but also about the export of potatoes: the closure of the borders will mean the loss of the channels for the supply of potatoes to Ukraine, Moldova and Serbia.
We are also closely monitoring the state of affairs in Ukraine. Last year, a record (about 200 thousand tons) amount of Russian potatoes was supplied to this country, and this is without taking into account the consignments sent to the regions of Donbass. This season, Ukrainian agricultural producers, despite the fact that their weather conditions were also difficult (remember, for example, torrential rains that flooded Western Ukraine at the end of June), expect that they will get a good harvest, and its volumes will be enough to cover the needs residents. But, again, a lot will depend on the harvesting conditions.
Summer 2020 in other European countries (Poland, Germany, the Netherlands) passed without serious natural disasters, and potato shortages are not expected there. This, however, does not mean that deliveries of European seed potatoes to Russia will also go smoothly. Rosselkhoznadzor is concerned about the phytosanitary situation in the Netherlands and intends to re-enact the regulation of interaction between the parties, providing for on-site inspections. With borders closed, it would be difficult to organize such trips. Of course, we are making efforts to mitigate the situation, but seed buyers need to consider all the risks involved.
At the same time, we are forced to state that the Russian potato-growing industry continues to be heavily dependent on imports. According to the estimates of the Potato Union, in the medium term, the import of potato seeds from the EU countries will remain at the level of 10 thousand tons annually. A special deficit is observed in the segment of industrial processing (chips, fries, starch), where there are practically no alternative varieties of domestic selection.
In addition, the volume of imports of raw materials is growing every year. (in vitro microplants and microtubers, minitubers), which is natural, given the trend to localize the production of seeds of foreign selection in Russia. The import of such material makes it possible to reduce phytosanitary risks, the cost of future seeds, improve their quality and strengthen the food security of the state.
I would like to highlight an important event for the entire industry: the Lam Weston Belaya Dacha plant has reopened. During the forced downtime during the pandemic, the company carried out work to improve the technology and is now ready to catch up.
I would also like to note that our fears related to the possibility of deliveries to Russia of last year's French fries, produced in Europe and not sold there due to the pandemic, did not come true. Although this scenario was quite likely, since the Europeans stated that they had about 2 million tons of product in their warehouses. The flow of products at dumped prices could seriously damage our market, but fortunately this did not happen.
Until the end of 2020, we are waiting for the launch of a number of new potato processing projects, but we will tell you more about this after the start of their work.
The Potato Union traditionally invites all market participants to attend the conference that we are organizing as part of the business program of the 22nd Russian agro-industrial exhibition "Golden Autumn". This year's conference was named "New Sales Channels and New Products". During their speeches, experts will pay maximum attention to discussing promising sales channels for potatoes and vegetables (as well as their processed products).
The conference will take place in the first decade of October, due to the current circumstances it will be held online, but we hope that thanks to this we will be able to significantly expand our audience and unite professionals from all over Russia.