Zuko Komisa
- South African potato farmers face a financial crisis as prices have crashed by over 50% due to a market flooded by a bumper harvest and expanded planting.
- The dramatic price collapse means producers are currently selling the staple crop below the cost of production, threatening the viability of agricultural businesses.
- The surplus was caused by a “boom-bust cycle” where favourable weather conditions and a mild winter followed previous seasons of high prices and restricted supply.
The South African potato industry is grappling with a severe price crisis, as a massive supply glut has driven market rates for the staple crop plummeting, in some cases, to over 50% lower than the previous year.
While consumers are enjoying the benefit of deflationary food prices, farmers are now selling potatoes well below their production costs, threatening the viability of many agricultural businesses.
Analysts report that prices on fresh produce markets have fallen to as low as R3.50 to R4.00 per kilogram, representing a loss of approximately R2.00 per kilogram below the estimated cost of production for growers.
Compounding the issue is South Africa’s reliance on fresh consumption, coupled with limited long-term storage or processing capacity to absorb the excess volume, forcing farmers to market their perishable crop immediately regardless of the low returns.
Kaya Biz with Gugulethu Mfuphi spoke to Thabile Nkunjana, Senior Agricultural Economist in the trade research unit of the National Agricultural Marketing Council.
Listen to the full conversation here:
READ NEXT: WATCH: Two arrested for assaulting female police officer in Kimberley
The post SA potato growers face financial ruin as prices crash appeared first on KAYA 959.
