During these two decades, potato area has remained relatively constant at an average 51.8 thousand hectares while yield improvements (average increase of 2.1% per annum) drove production gains. The average potato yield in 1998 was 30.4 tonnes per hectare, in 2018 the average potato yield was recorded at 46.5 tonnes per hectare and by 2028, BFAP anticipates yields close to 50 tonnes per hectare - an average annual growth of 1.2%.
In 2019, potato production is projected to increase by 3.3% to 2.54 million tonnes. This is derived from an increase in area planted of 1 090 hectares, and an increase in the national average yield to just over 47 tonnes per hectare. Over the coming decade, potato production is projected to increase by an average of 0.7% per annum to just over 2.7 million tonnes in 2028. The increase is also primarily driven by higher yields. In the long term it is assumed that factors such as research, cultivar development, better production practices and better plant protection products will drive an average increase in yield of 1.2% per annum.
Potato prices are driven by domestic supply and demand dynamics, as potatoes are not typically traded in bulk. Therefore, potato prices are very sensitive to local weather events. The nominal market price of potatoes seems to have normalised after the drought-induced extremes during 2016 and 2017. Due to an increase in domestic production, potato prices are projected to decline from R38.70/10kg bag in 2018 to an annual average of R36.50/10kg bag (-5.7%) in 2019. After accounting for inflation, the real average market price has been trending sideways at a level of around R30/10kg bag. Sideways real market price movement implies that nominal prices increase at roughly the same rate as inflation over the long run.
In the short term however, the real (2012) potato market prices is expected to decrease by R5.25 to R28.98/10kg bag in 2019. In line with increased production, domestic consumption is expected to increase by 2.1% to 2.38 million tonnes in 2019.
Fresh formal consumption (at fresh produce markets and retailers) makes up 39% of the total domestic use, while informal fresh consumption accounts for a further 32%. Roughly 22% of potatoes produced in a given year are processed and the balance is 'seed'-production. Since 2008, fresh informal potato consumption grew on average at twice the rate (2.4% per annum) of fresh formal potato consumption (1.2% per annum). A similar trend is projected for the outlook period albeit at a slower rate - formal potato consumption is projected to increase to 995 000 tonnes while informal potato consumption is projected to increase to just over 800 000 tonnes in 2028.
