Potato Review

22 POTATO REVIEW SEPTEMBER/OCTOBER 2019 AHDB ON THE SPOT BY AIDAN WRIGHT In each issue of Potato Review, the AHDB’s potato team share their insights with our readers. In this month’s column analyst Aiden Wright discusses some of the challenges facing the chipping market currently. A S the section of the GB potato industry which is the least contracted, the chipping market is characterised by high volatility depending on levels of production. However, demand may shift signi cantly this season, adding further weight to what is already shaping up to be a good crop. Chip shops under pressure Domestically, the lack of contracts in the chipping sector meant that end users were exposed to the full extent of the high prices last season. In an attempt to cope with this, many chippies cut portion sizes to reduce overhead costs and increase margins. Despite a dip in potato prices moving into the new season, there seems to be little incentive for chip shops to revert back to previous practices. Prices for other rawmaterials, including white sh and vegetable oil, remain high or are likely to increase later in the season. As such, many are likely to reduce costs wherever possible and portion control is one of the best ways to boost margins. ere has already been a longer-term shift towards smaller portion sizes and this may simply be accelerating this process. The no-deal Brexit scenario Looking overseas, a halting in potato exports as a result of a no-deal Brexit would add further weight to the balance sheet. e UK exports around 55Kt of fresh potatoes to the Republic of Ireland each season and the majority of these are chipping potatoes grown in the east of England. ese good quality frying potatoes make their way over the Irish Sea and end up in chippies fromDublin to Donegal. However, in a no-deal Brexit situation, the UK would be unable to export fresh potatoes to EU countries. Exports to Irelandwould grind to a halt pushing these supplies into the domesticmarket. For exports to the EU to resume, Brussels would have to determine that UK phytosanitary controls and regulations t within the EU framework. While this seems simple enough, given the UK’s high standards, the actual timeframe cannot be estimated. Muted domestic demand Realistically, this issue could take some time to reach a conclusion. Each month that these issues remain unresolved, an increasing volume of chipping potatoes will need to nd a home in a domestic market in which demand looks muted at best. Looking longer-term, the potential for an 11.5% tari on fresh potatoes could make UK supplies uncompetitive into Ireland. Combined with a continued reduction in chip shop portion size, until production is scaled back, we could see seasons of average production being met with subdued prices in the chipping sector. Will Brexit have its chips?

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