CULTIVATION AND TECHNOLOGY Will the European advantage last? Fresh potatoes might be important in individual markets across the world, but trade in potatoes is dominated by trade in products, especially frozen French fries. With potato consumption levelling off in developed markets in North America and Europe, fry processors are looking to other parts of the world to sell more products with that battle for market share dominated by four players – from Europe there are Belgium and the Netherlands and from North America the USA and Canada. European suppliers as they are making product from low priced potatoes, US suppliers have been subject to disruption in their West Coast ports and a strong dollar is making sales in the euro more competitive. Between them, the four main exporters shipped more than 5.1 million tonnes of fries in the 12 months to the end of October 2014 (the latest figures available). That was the highest annual to that month ever and up 200,000 tonnes on the previous year. The first chart shows that there has been a dramatic change in who supplies the world’s fries over the last decade. In 2005 the Dutch were the largest suppliers, shipping more than 1.2 million tonnes a year. They are still a major supplier shipping 17% more fries in 2014 than in 2005, but that figure was still not able to beat the 1.758 million tonnes exported by Netherlands’ neighbour Belgium. Its investment in production and processing over the last 10 years has meant that it ships 135% more now than it did 10 T his year the advantage is firmly with years ago. The other country to experience significant export growth is the USA. It now ships nearly 80% more fries every year than it did 10 years ago, overtaking Canada which has seen its shipments slip by 4% and drop from the world’s second largest fry exporter to the fourth. More than 80% of Canada’s fry trade is with the US. Belgium has had a price advantage for much of the last 10 years and that has helped drive sales. The average Belgian price for the year is US$902/tonne. That is 21% less than the average US price, 14% lower than the average Dutch price and 8% down on the average Canadian price. Growth in Japan and China It is worth looking at two key and growing export markets to see how competition between North American and European fry suppliers is taking place. Those markets are Japan and China. Japan has traditionally been the largest non-American or European fry market and one that was dominated by the USA. But since 2011 European processors have used their price advantage to sell more product at the expense of the USA and Canada. Since 2011 total imports have dropped by 4.9% with US supplies down 7.2% and Canadian imports down 19.6%. In contrast Belgium imports have risen by 9.8% and Dutch by a massive 8000%+. The big increase in Dutch imports has been driven by the lower price of its Potato World 2015 • number 1 23 Pagina 22
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