COVID-19: Potato Industry in Developing Countries Takes Softer Blow

The closure of restaurants and other food service establishments has significantly reduced the demand for processed potato products. In the West, where most potatoes are bought by food businesses, this has been much more severe, says a report published by the International Potato Center (CIP).

The sudden fall in demand has created a glut in local markets, with millions of tons of processing potatoes in cold storage and an oversupply of processed potato products. At the same time, demand for fresh table potatoes in supermarkets and grocery stores has risen substantially. The industry is trying to divert more fresh potatoes to grocery stores, to meet the growing demand, with additional processed potato products also being moved into supermarkets. But this compensates for a mere fraction of the demand lost due to the closure of food businesses.

"Compared to the West, the impact of COVID-19 on potato sales is playing out very differently in developing countries, where the crop is primarily grown for fresh consumption. In both India and China, the top two potato producers, accounting for 38% of global production, most potatoes are consumed fresh. The increase in fresh potato purchases has resulted in price increases, with a 25‒35% increase in retail prices, INR18–25 (USD0.23–0.33) per kg in many Indian states. Apart from the sudden increase in demand, lower production in many of India’s potato-growing regions due to unfavorable weather conditions has also contributed to price increases," the report states.

Unlike in the West, Asian farmers are not faced with the problem of a fresh processing potato surplus because this segment of the market accounts for a small proportion of their production (5% in India and 10% in China). The rising consumption of processed potato products in Asia, particularly frozen French fries, is met by importing, primarily from the United States and Europe. With the closure of restaurants and other food establishments, imports of processed potato products from the West are likely to be the only ones adversely affected by the pandemic.