The crop is grown in 16 regions across the country, with Limpopo being by far the largest producer. (Photo by Remsberg Inc/Design Pics Editorial/Universal Images Group via Getty Images)
Potato prices are expected to rise by more than 100% in Limpopo province following damage caused by black frost in July.
Limpopo is South Africa's largest producer of staple crops.
Potatoes SA said it was still assessing the extent of damage to crops, but information and regional manager FP Coetzee said some farmers' crops had been devastated.
“Some farms have been wiped out, others have only been burned. The tricky part is the age of the potatoes when the frost hits. Some potatoes are a week old, some only a week old. Some still have a chance to recover.”
Potatoes SA business analyst Ange Venter said initial assessments indicated about 1,800 hectares of potatoes appeared to have been affected by frost.
National Agricultural Marketing Council economist Thabihle Nkunjane said Limpopo was the largest supplier of potatoes so the impact of the frost on yields, supplies and prices would be more pronounced.
“In reality, in other regions [the Western Free State and Sandveld] “There may be some supply, including in the Northern Cape, but the problem has been in Limpopo and that should affect the province's harvest from now until the end of the year,” he said.
Nkunjane said the price fluctuations would be felt between the end of August and early September, by which time the potatoes would have been available in the market if they had not been damaged. He added that there could be a surge in demand towards the end of the year.
Potatoes are still priced at under R80 per 10kg, which is considered cheap compared to around R120 per 10kg at the end of last year, when power outages and input costs pushed prices up.
Nkunjane added that prices may rise in the short term as the extent of the damage is still unknown.
Water shortages, rising prices
Another issue that is likely to push up staple food prices is a proposal by the Department of Water and Sanitation to ask Western Cape farmers to reduce water withdrawals by 30 percent to ensure there is enough water for people and the environment.
Potatoes SA said in a statement that this would have a significant impact on potato production in the region: “This will put 30% of potato-growing area in the Sandveld out of production and will result in a quadrupling of potato prices.”
The Sandveld region is one of the few areas that produces potatoes year-round, which is said to contribute to a stable supply. A reduction in production in the Sandveld is likely to have an impact on the Western Cape fresh produce market.
FNB agricultural economist Paul Makhube said a reduction in the area planted to potatoes would also affect prices.
“If the area under cultivation falls by around 30 per cent, potato prices are likely to rise by more than 100 per cent in the near future because supplies will no longer be available and prices will have to rise. So, it is common for prices to rise by 100 to 150 per cent due to bad weather or shortage of supply in the market,” he said.
However, Mr Venter said any potential price increases could be offset because “potatoes are grown in 16 different regions across the country”. [that are less affected by frost]Some of these regions produce year-round, which could help ensure a stable supply and prevent excessive price increases.
Makube said production was expected to pick up as early as next year if the weather improved.
“Longer term, obviously the weather is improving and higher prices in the market will stimulate production in other areas and will more or less offset the acreage losses in some areas, but that will be a higher price level that consumers will have to put up with for quite some time.”
Nkunjane said better contingency plans were needed to protect farmers and their crops, especially with regard to climate change.
Venter agreed that government subsidies for farmers could help them recover faster and maintain production levels, while supply chain efficiencies and financial instruments such as farm insurance could also protect the industry and its assets.
“Those farmers [who have] “Crop insurance, if enacted, may provide financial relief and ensure production continuity, but it could again impact supplies and prices later this year or early next year,” he said.
“Unfortunately, crop insurance is a big expense that not many farmers have, so this positive market trend is not providing a cushion for the potato industry right now.”