SA’s potato industry says it’s looking to invest into expanding local production to meet high demand for French fries amid a widening demand-supply gap.
SA imported about 13,000 tonnes of frozen chips in 2020 despite low demand due to Covid-19 lockdowns, which brought economic activity to a near standstill. The figure nearly doubled to about 24,000 tonnes last year amid local shortages.
This week, local industry players in the food value chain raised concern about the shortage of French fries after the government moved to introduce higher duties for imported frozen potatoes from Europe. The decision was meant to protect the local industry, a move likely to push up the price of French fries at a time when many households are struggling to afford basics.
Willie Jacobs, the CEO of Potatoes SA, which represents local producers, said on Tuesday that the association was urgently investigating opportunities to invest in expanding local production facilities to meet high demand for French fries while supporting local potato farmers.
“A distinction must be drawn between fresh potatoes and processed products such as French fries, as SA potato farmers were producing a surfeit of fresh, raw potatoes,” Jacobs said. “One of the major issues facing farmers, however, has been finding suitable opportunities for storing and processing these potatoes to manage price volatility and profitability, and prevent waste.”
Higher demand for locally manufactured frozen French fries represented a highly attractive, mutually beneficial solution for the industry and the country, he said.
Jacobs estimates 12,000 tonnes of fresh potatoes are available at national fresh produce markets around the country every day. But there is not enough production capacity to meet the demand for processed products such as French fries.
“SA is unique in that, unlike many countries, our seasons and climate means that we have the ability to produce potatoes the entire year, ensuring steady supply. This said, we have also met with various businesses to discuss their needs for items such as French fries, and have noted concerns regarding gaps in supply chains for processed products,” Jacobs said.
‘Sustainable development’
“We firmly believe that through using private-public partnerships to invest in expanding production capacity, the potato industry will be able to create further value for the SA market, while driving sustainable socioeconomic development,” he said.
Fred Hume, the MD of Hume International, a major importer and distributor of frozen food-based commodities, on Monday called on the government to urgently lift the import duties on French fries because the local industry was unable to meet market demand.
He said that imposing sudden, sharp tariff hikes risked placing consumers under even more pressure.
The International Trade Administration Commission — the organisation responsible for customs tariff investigations, trade remedies and import and export control — imposed provisional anti-dumping duties for frozen potato chips imported or originating from Belgium, Germany and the Netherlands.
The provisional duties — which are up to 181% for German producers, 104% for some producers in the Netherlands and 23% for those in Belgium — will be in place until January 2023, when the final five-year tariff determination will be finalised.
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