This year the sowing campaign takes place under special conditions, but the potato industry hopes that all the problems that this spring brought will remain in the distant past by the start of harvesting, and the harvest will compensate for all the efforts and resources invested in it.
According to the Federal State Statistics Service, as of April 1, the volume of stocks of potatoes of the old crop in the storages of large agricultural enterprises in Russia was 9% higher than last year on the same date. But in fact, this figure did not quite correctly reflect the situation: in fact, by this time, the resources of high-quality Russian potatoes had already been exhausted.
Characterizing this situation, we can say that the shortage of high-quality potatoes in the market was already felt by the end of winter. In mid-March, when the country's inhabitants began to make food supplies, interest in potatoes also increased, against this background there was a jump in prices (up to 20 rubles / kg), and all remaining volumes were sold in a short time. Those producers who were able to keep the crop up to this point received a good profit.
Today, the price of potatoes on the market varies from 10 to 18 rubles / kg. At the same time, some regions (in particular, the Moscow Region, the Republic of Tatarstan) note that the cost of potatoes by the middle of May this year is approximately 20% higher than last year: the products are sold at a price of 15-16 rubles / kg for a lot of average quality. Poor quality products are sold everywhere at a price of 7 rubles / kg.
We also note that approximately from the middle of winter, domestic potatoes on the shelves of Russian stores have been competing with imported ones: according to the Federal Customs Service, in January, 300 tons of potatoes from Egypt (apparently, a test batch) arrived in Russia, in February - more than 6 thousand tons. According to trade operators, Egyptian potatoes were sold through networks at prices ranging from 35 to 45 rubles (purchase price - 42 cents / kg) and, given the devaluation of the ruble, did not bring much profit to trade organizations. There is evidence that certain batches of products even had to be disposed of.
In addition to the Egyptian, today in the domestic market there is early potato from Israel, Azerbaijan, Turkey. Most likely, these products will soon gain popularity among customers due to the lack of high-quality potatoes of the old crop. But prices for it still remain at the level of last year.
Also, deliveries of new potatoes from the southern regions of Russia (Krasnodar Territory, Astrakhan and Rostov Regions) are about to begin. Cooling postponed the harvesting period by about two weeks, but by the 20th of May the situation began to improve.
Interestingly, the production of early potatoes is becoming a trend for the central regions of Russia (for example, for the Moscow region): farmers plant potatoes under a film or other covering material. The result can be obtained later than in the Krasnodar Territory, but noticeably earlier than usual for the middle band.
Seed potatoes
The fact that suppliers of seed potatoes from Europe to Russia this year had to face great difficulties, we wrote in the last issue of the magazine. There are many reasons for this, including changes that were made to the rules for controlling regulated products on the Russian side (Decree No. 128 of the Rosselkhoznadzor), updating regulatory documents in Europe, and a whole series of factors.
Relatively quickly managed to resolve issues with the supply of seed potatoes from Finland and Germany. Representatives of the Rosselkhoznadzor were able to travel to these countries, conduct sampling and make the necessary laboratory tests. And then the borders began to close due to the coronavirus.
Given the situation, the Rosselkhoznadzor agreed to simplify the import of planting material (abandoning on-site inspections). Thanks to this, consignments of seeds from France and the Netherlands passed through the “green corridor”, and most of the potatoes chartered for Russian buyers nevertheless entered our country.
It is too early to summarize the deliveries before the end of the planting campaign, but now it can be assumed that the volume of import of seed material from Europe in the current season will not exactly exceed last year's figures (in 2019, about 9 thousand tons of seed potatoes were imported to Russia), but rather In total, it will be below this level - about 8 thousand tons.
I would also like to say a few words about the positive developments in this area, which are very important for the development of many domestic enterprises: in May 2020, two large lots of minicubers from China and India (about 0,5 million pieces) arrived in Russia. Most of the material is varieties for processing (customers - LEM Weston Belaya Dacha LLC and other large projects), but there are also table varieties.
Landing campaign
According to the Ministry of Agriculture of the Russian Federation, this year 309 thousand hectares will be allocated for potatoes in the industrial sector, which is approximately 4 thousand hectares higher than last year.
Some regions are increasing their area, others are decreasing, but we are not observing any major changes leading to the replacement of participants in the list of leaders in terms of cultivation. We can distinguish a multidirectional trend in the industry as a whole: in parallel there is a reduction in the area under potatoes in small farms (dissatisfied with the low profitability of the crop) and growth in large ones.
By May 20, planting was completed on an area of 192,9 thousand ha (62,5% of the projected area).
Agrarians of the Bryansk region are successfully operating (planting is 15% completed by May 86), potato growers of the Urals and Siberia report favorable weather conditions and the fast pace of work. At the same time, the situation in the Nizhny Novgorod and Moscow regions remains rather complicated (both there and there by May 15 they managed to plant potatoes in only a third of the planned areas), where it rains and the weather remains cold.
We also note that this year many regions of Central Russia and the Volga region (including the aforementioned) complain of a lack of moisture in the middle and low arable horizons. Drought, a consequence of dry autumn and snowless winters, can adversely affect future crop volumes.
Spring crisis
In our opinion, the pandemic and, in particular, the introduction of quarantine have not yet had a strong impact on potato enterprises. Logistic problems were noted in some regions, but they eventually found a solution. More noticeably, devaluation of the ruble hit agricultural producers. The increase in the exchange rate was expectedly caused an increase in prices for supplies.
If we talk about the industry as a whole, then of course, one cannot fail to note serious problems for processors. Separate enterprises focused on the HoReCa sector were forced to stop production. But we still assess this situation as temporary. Processing will develop, new projects are being prepared for launch, there is information that a significant part of Astrakhan farms have signed contracts for growing potatoes for fast food restaurants. Many large potato producers are thinking about starting production (let it most often be the issue of peeled and vacuum potatoes). The process could go faster if Russia had a separate targeted program stimulating the construction of processing plants, but so far it has not.
Moreover, the issue of state support for potato growing is becoming increasingly complex. As you know, now there are two types of support: unrelated and stimulating. Moreover, the Ministry of Agriculture of the Russian Federation plans to reduce the volume of the first and increase the second in three years. But in the list of priority areas in crop production (which regions determine for themselves and which stimulating support will be directed), there is no item “growing potatoes”, there is only “open-field vegetable growing”. Our experts fear that in the future this may lead to the fact that potatoes will cease to be classified in this category, which means that potato growers will lose a significant amount of subsidies. The Potato Union has already drawn the attention of the Ministry of Agriculture to this problem and is keeping the solution to this issue under control.
The concern in the industry is also caused by a potential decline in the incomes of the population, which is much discussed now. But most likely, there will not be a sharp change in the structure of consumption in the coming months. Buyers will not refuse washed packaged potatoes. Experts predict even a small (about 2-3%) increase in demand for primary products.
Although the desire of the authorities of a number of Russian regions to increase the production of potatoes in the personal farms of citizens (Kostroma Novgorod, Tver, Kurgan and other regions) does not please. We hope that the volumes of “personal harvests” will not affect the market.
New records
At the end of the review, I want to say a few words about the implementation of the industry-important subprogram “Development of Potato Breeding and Seed Production in the Russian Federation” (the interim results of which are given in the draft National Report on the progress and results of the implementation in 2019 of the state program for the development of agriculture and regulation of agricultural markets products, raw materials and food).
As indicated in the document, the target indicator “the number of new domestic competitive varieties created as part of the subprogram” in 2019 was 500% fulfilled. This means that instead of the planned two varieties, Russian breeders immediately created 10 (varieties Northern Lights, Elena, Gulliver, Samba, Prime, Carmen, Indigo, Triumph, Bear, Kumach). Another 20 varieties are being prepared for state registration. Within the framework of the subprogram, seed potatoes of domestic selection of the “elite” category with a volume of 2035,45 tons were also produced and sold, despite the fact that the achievement of this indicator in 2019 was not planned at all.
On the one hand, the Potato Union can neither rejoice at victories of this level. On the other hand, I would very much like to see clear evidence of the above: for example, the results of variety tests, which allow us to conclude that the new Russian varieties really exceed the capabilities of foreign ones.