New Zealand Potato Sector Annual Update 2012

An Expert's View about Agriculture and Animal Husbandry in New Zealand

Posted on: 30 Jul 2012

Bumper Production of 586,000 MT was a result of very good growing conditions over the 2011/2012 growing season.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 7/24/2012 GAIN Report Number: NZ1208 New Zealand Post: Wellington New Zealand Potato Sector Annual Update 2012 Report Categories: Potatoes and Potato Products Agricultural Situation Approved By: Joe Carroll, Agricultural Counselor Prepared By: David Lee-Jones, Agricultural Specialist Report Highlights: Bumper Production of 586,000 MT was a result of very good growing conditions over the 2011/2012 growing season. This has resulted in an overhang of produce in the domestic market and is depressing prices. The Tomato/Potato Pysllid is still a significant problem but growers are learning to live with it. Exports jumped up to 103,000MT in CY2011. New Zealand Potato Sector 2012 Report Overview NZ Potato Industry Planted Area: New Zealand Potatoes - Planted Area in Hectares 2005 2006 2007 2008 2009 2010 2011 10,850 .. 10,050 .. 11,398 .. 10,724 Source: Statistics New Zealand, .. – figures not available Production: Usually 500,000 to 550,000 metric tonnes Product Streams: Approx 33% of area grown goes to table potato production; 56% of the area grown is destined for processed products; and 11% of the area produces seed potatoes. Main growing areas: Pukekohe, Hawkes Bay, Manawatu and Canterbury, Fresh potatoes can be harvested all year round. Most potatoes in Manawatu, Hawkes Bay & Canterbury are grown with irrigation. Number of Growers: Approximately 200 Most common commercial varieties are: Russett Burbank, Innovator, Rua, Nadine, Agria, Moonlight, Desiree, Ilam Hardy, Red Rascal, Ranger Russet and Shepody. Main Processors: Frozen processing is dominated by McCain Foods of Canada, which has a plant in Timaru (potential output 140,000MT), and Simplot/Mr Chips with plants in Auckland and Christchurch. The crisping industry is small in New Zealand with the main three processing companies operating here: Bluebird, owned by PepsiCo-Frito Lay; ETA owned by PEP of Australia; and New Zealand company, Fresher Foods, now being joined by grower owned Heartland. 2011/12 Season Growers right around New Zealand enjoyed benign growing conditions from September 2011 through till May 2012 and consequently produced a bumper national harvest estimated at 586,000MT. Consequently there is now an overhang of surplus produce in the market which is depressing fresh table prices. It is thought that the main processors are hanging onto significantly increased levels of inventory. One processor has indicated it will decrease its intake by 10,000MT next season at one factory which currently produces approximately 60,000MT of frozen french fries. Trade Exports New Zealand Potato and Potato Product Exports % chang Quantity in Metric Tons for Calendar Year % total e Destinatio in 10 to n Country 2004 2005 2006 2007 2008 2009 2010 2011 2011 11 8727 8743 10919 10222 9403 10135 9866 10305 100.0 World 5 1 3 3 1 7 0 0 % 4% 2096 2186 4890 4055 Australia 1 7 46530 48170 8 44962 6 51647 50.1% 27% 2065 2023 1804 1899 Fiji 3 6 21916 20587 1 19359 6 18238 17.7% -4% Thailand 2652 3413 4151 2875 1244 2804 1296 4955 4.8% 282% Japan 4323 3398 3995 4515 2835 3882 4011 4526 4.4% 13% French Polynesia 3885 3810 4300 4808 4104 4093 4622 4313 4.2% -7% Papua New Guinea 876 1087 1010 1806 1886 2242 2912 3454 3.4% 19% New Caledonia 2229 1541 1556 1569 2599 2013 1856 3098 3.0% 67% Malaysia 7381 9629 9019 5849 3908 6945 9739 3016 2.9% -69% Indonesia 3318 4948 3366 1442 1086 793 2152 2840 2.8% 32% Philippines 7559 5176 1443 1338 1311 2550 2359 1633 1.6% -31% Rest of the 1343 1232 1016 World 8 5 11909 9264 8111 11716 2 5331 5.2% -48% Source: Global Trade Atlas New Zealand Potato and Potato Product Exports by Product Type % % chang Quantity in Metric Tons for Calendar Year total e in 10 to Description 2004 2005 2006 2007 2008 2009 2010 2011 2011 11 Fresh, Frozen, par-cooked, 8727 8743 10919 10222 9403 10135 9866 10305 100.0 preserved, Total 5 1 3 3 1 7 0 0 % 4% Potatoes (Except Sweet Potatoes), 2729 2716 2566 3024 Fresh Or Chilled 5 7 27346 25576 6 29393 5 29973 29.1% -1% Potatoes Uncooked/Cooke d By Boiling In Water, Frozen 349 516 99 33 161 179 114 688 0.7% 504% Potatoes, Prepared Etc., No Vinegar Etc., 5889 5939 6786 6801 Frozen 2 5 81462 76386 9 71488 4 71035 68.9% 4% Potatoes, Prepared Etc. No Vinegar Etc, Not Frozen 740 352 285 229 335 297 287 1354 1.3% 372% Source: Global Trade Atlas Source: Global Trade Atlas New Zealand Import Statistics Commodity: Potatoes all HS codes, Fresh, Frozen, par-cooked, preserved Calendar Year: 2009 - 2011 Quantity % Share % Change Partner Country Unit 2009 2010 2011 2009 2010 2011 2011/2010 World T 18636 14893 14046 100.00 100.00 100.00 - 5.69 Australia T 13927 10710 9019 74.73 71.91 64.21 - 15.79 United States T 239 533 1813 1.28 3.58 12.91 240.25 Belgium T 1858 1453 1349 9.97 9.75 9.60 - 7.16 Canada T 754 883 912 4.05 5.93 6.49 3.28 Netherlands T 954 576 422 5.12 3.87 3.01 - 26.70 China T 746 450 197 4.00 3.02 1.40 - 56.35 Germany T 3 37 58 0.01 0.25 0.41 56.17 New Zealand T 1 0 51 0.01 0.00 0.37 0.00 Switzerland T 0 106 45 0.00 0.71 0.32 - 58.13 Mexico T 0 31 31 0.00 0.21 0.22 0.88 Rest of World T 153 115 149 0.82 0.77 1.06 29.57 Source: Global Trade Atlas New Zealand Import Statistics From World Commodity: Potatoes all HS codes, Fresh, Frozen, par-cooked, preserved Calendar Year: 2009 - 2011 Quantity (MT) % Share % Change Description 2009 2010 2011 2009 2010 2011 2011/2010 Total Fresh, Frozen, par-cooked, preserved 18636 14893 14046 100 100 100 -5.69 Potatoes, Prepared Etc., No Vinegar Etc., Frozen 17484 13509 12161 93.82 90.7 86.58 -9.97 Potatoes Uncooked/Cooked By Boiling In Water, Frozen 356 807 1126 1.91 5.42 8.02 39.63 Potatoes, Prepared Etc. No Vinegar Etc, Not Frozen 795 578 758 4.26 3.88 5.4 31.18 Potatoes (Except Sweet Potatoes), Fresh Or Chilled 0 0 0 0 0 0 n/a Source: Global Trade Atlas Market Comment & Policy/Market Access Australia – The Potato sector’s, main export market, took a volume increase of 27% in 2011. Frozen potato chips comprise 98% of the total volume and crisps make up the other 2%. Australia still prohibits all unprocessed potato imports. The New Zealand industry is seeking access for potatoes to processing facilities (as quarantine approved premises) for the manufacture of potato crisps and secure disposal of wastes. Some progress has been made with DAFF just having released a report which recommends fresh potatoes could be imported into approved premises for processing subject to a set of phyto-sanitary conditions. The Australian industry has 60 days to make submissions. Japan - New Zealand has requested access for potatoes for processing in secure facilities (e.g., French fries or potato crisps factories). (The US obtained access to Japan in 2006.) Despite the processing of these products it is likely that Japan will require specific phyto-sanitary measures for potato cyst nematode. No progress has been made with this request. Korea –While New Zealand’s potato growers have finally got a protocol for exporting fresh potatoes to South Korea the severe phyto-sanitary, and crop sustainability conditions for access have so far continued to block access. It is likely that NZ Authorities will go back to Korean officials to try to renegotiate parts of the protocol. Seed potato exports are not included. The main interest in fresh potatoes will be for processing. Korea imports about 16,000 tons of fresh potatoes annually, mostly for “chippies”. Malaysia – This market had been identified as having considerable potential for future growth for NZ exports. In 2010 exports to Malaysia really kicked off, increasing by 40% on the back of increased frozen processed product. However in 2011 exports have slumped by 69%, back to 3,016MT on account of virtually all frozen product exports ceasing. Fresh exports were up 77% to 2,525MT. It is likely the frozen product manufacturers in NZ were able to get better prices from exporting to Australia. South East Asia – It is still considered that generally SEA holds considerable potential for receiving increased exports from NZ, especially as cheaper Chinese product is disappearing out of the markets. One of the other markets specifically identified by PotatoesNZ was Singapore. In the past Singapore has been one of the top ten destinations by volume reaching 5,449MT in 2010, with 85% of the volume being frozen processed product. However in 2011 exports slumped to 599MT. Again the major casualty was the frozen processed product where it is likely better prices in Australia meant product was redirected. Middle East - United Arab Emirates, and Saudi Arabia have also been identified as having significant potential but to date no market development work has been carried in either of these destinations. Potato/Tomato Psyllid Potatoes NZ is undertaking a range of research and extension projects to help growers deal with the tomato/potato psyllid, Liberibacter, and Phytoplasma complex which includes workshops; conferences; the establishment of a psyllid working party, and Government funded Sustainable Farming Fund research and extension projects. Control of this one pathogen alone is costing growers NZ$500-700/ha per year, and crops in all growing regions can be affected. The voluntary $1/T levy to raise funds for research and information extension has been successful but has been terminated now. The Sustainable Farming Fund research and extension projects will continue for at least another year. Click here for additional information: http://potatonz.org/psyllid.html Additional Information Horticulture NZ: http://www.hortnz.co.nz/ Potatoes NZ: http://www.nzpotatoes.co.nz/ Ministry of Foreign Affairs and Trade: http://www.mfat.govt.nz/Trade-and-Economic-Relations/Trade- Relationships-and-Agreements/index.php Drafter: David Lee Jones - July 2012 Email: david.lee-jones@fas.usda.gov
Posted: 30 July 2012

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