POTATOES’ PANDEMIC RECOVERY Words by Gemma Carroll : Communication & Engagement Office, Potatoes NZ Inc.
Our industry’s role in New Zealand’s economic and social recovery, building on our strengths and playing a critical role. The 2020 global pandemic crisis saw a rapid change to our onfarm management and to potato processing facilities. Our growers and employees adapted calmly and swiftly with innovative approaches to physical distancing and keeping their teams safe and well. Thankfully our integrated database meant that communicating fast-changing, sometimes daily responses, was very effective. The greater impact was not so much to the changes in worker health and safety, but to a slowing of production due to the restrictions on-farm, which resulted in a backlog of produce. As soon as the alert levels dropped, the surplus fresh product was mostly moved into the supply chain. The greater impact was in the food supply chain disruptions. With hospitality closed for two months, both fresh and frozen fries saw a significant drop in volumes moving to market. In addition, fresh produce outlets were closed as well, which hindered fresh potato sales. This meant some dumping of fresh potatoes, but also redistribution to food banks. Thankfully in times of crisis, consumers turn to comfort food and therefore crisps maintained good sales, with shelves often emptying out in store.
62
NZGROWER : AUGUST 2020
Export of fresh potatoes has remained stable in volume but there has been a significant drop in value from $800 per tonne at the start of 2020 to around $450 per tonne at present. New Zealand exports of frozen fries remain pretty much where they were in 2019 for volume and there has been a minimal drop in value. The frozen fries industry has been extremely concerned over the potential dumping of European frozen product, as the industry in Europe has seen a glut of 2.6 million tonnes due to their hospitality closures. Europe has defended itself in response to sturdy New Zealand media coverage of the concerns, however the New Zealand industry has pushed ahead with an application for anti-dumping to the Ministry for Business, Innovation and Employment (MBIE) submitted on the 3 July 2020. Minister Faafoi indicated sympathy in a meeting with Potatoes NZ, and MBIE offered support if needed in evidence gathering and preparing the application. According to PNZ analysis, dumping margins are currently anywhere
between 95% to 151%. We expect these margins to increase. This will lead to price undercutting for the New Zealand industry of between 18% and 38%. The damage this will cause will destroy the New Zealand industry. Given that Potatoes NZ has shown in the application to MBIE that dumping exists and huge surplus inventories of frozen potato products exist, it is clear that the threat is real and an investigation into anti-dumping duties is warranted. A separate Potatoes New Zealand commissioned Economic and Community Impact Report from Business and Economic Interest Limited (BERL) concludes that in the absence of a duty, potato processors would be forced to cut production and demand for potatoes from New Zealand growers would drop. Inevitably, this would lead to a loss of employment and a threat to the viability of some potato growing businesses. The imposition of an antidumping duty on dumped imports of frozen potato products would help to maintain demand for New Zealand grown potatoes, and ensure
