Potato 2016 Market Analysis and 2017 Market Forecast

As one of the important food resources, potato not only plays an important role in the daily consumption of Chinese residents, but also plays an important role in the adjustment of agricultural structure and the continuous increase of farmers' income in the new period. At the beginning of 2016, the Ministry of Agriculture issued the guidance on promoting the Development of Potato Industry, clarifying the role, status and objectives of potato industry in the national food security strategy, agricultural supply-side structural reform and the transformation of agricultural development mode in the new period.

Since the beginning of this year, China's potato industry has continued to develop steadily. Generally speaking, the planting area of the whole country has increased steadily, the production of some producing areas has been greatly reduced due to the influence of extreme weather and epidemic diseases, and the total output has decreased slightly. The consumption structure of potato has changed slightly; the price has maintained a high level, showing an obvious "N" trend. Potato trade surplus and potato starch trade deficit exist at the same time, showing a double decreasing trend as a whole. It is expected that the agricultural structure adjustment, processing staple food and precise poverty alleviation strategy in the "sickle bend" area in 2017 will further enhance the production and supply capacity of potatoes, while the overall consumer demand will remain stable and slightly increase; as stocks are gradually digested, prices will remain high in the short term, and prices are likely to fluctuate sharply in the second half of the year without serious natural disasters. With the expiration of the "double negative" policy, the uncertainty of international trade of potato starch increases. At the same time, the growth rate of potato supply is much greater than that of consumer demand, the risk of price fluctuations continues to accumulate, and the possibility of difficulties in selling in some areas and individual periods has increased. It is suggested that we should further pay close attention to the changes in the market situation, balanced listing and timely sale of potatoes, and at the same time, do not blindly follow the trend of planting, and reasonably promote grain and potato rotation.

I. Review of Potato Market in 2016

(1) some areas have been seriously affected by disasters, and production as a whole continues to develop steadily

In recent years, potato production in China has developed rapidly, and the planting patterns of the first cropping area in the north, the second cropping area in the Central Plains and the second cropping area in the south and the first and second season mixed cropping areas in southwest China have been initially formed, covering most provinces, autonomous regions and cities in China, and the perennial planting area is stable at about 85 million mu. The total output is maintained at more than 90 million tons.

Although some areas were severely affected in 2016, potato production in China as a whole continued to develop steadily this year. In terms of planting area, affected by the adjustment of agricultural structure and the operation of high prices this spring, the enthusiasm of potato cultivation across the country has increased significantly, coupled with the acceleration of the adjustment of planting structure and the strategy of precise poverty alleviation in the "sickle bend" area. the planting area in Heilongjiang, Yunnan and Guizhou has increased steadily, and the national planting area is expected to be about 85.26 million mu, an increase of 3.0% over the same period last year. With the continuous improvement of the popularization rate of virus-free seed potato and the level of field management, the yield per unit area of potato has increased steadily. However, the severe occurrence of persistent drought in the main producing areas of northwest and northeast China, large-scale late blight in southwest region and low temperature and cold injury in southern autumn and winter cropping areas have led to a decrease in the average yield per unit area of the whole country. Affected by this, the total potato output for the whole year is expected to be about 92.01 million tons, down 3.0% from the same period last year.

(2) adequate market supply and stable consumption structure

From the point of view of use, potato can not only be eaten directly, but also can be used as raw material for food industry, medical and health and other fields. However, from the perspective of consumption, potato consumption in China is dominated by consumption, supplemented by processing consumption, seed consumption, feed consumption and other uses. In 2016, the overall supply of China's potato market is sufficient, and the consumption structure is changing steadily. Affected by the slow recovery of the macro economy, the continuous increase in the return of migrant workers to their hometown, and the reduction in the supply of raw materials in the main processing areas in the north, food consumption has decreased slightly, and processing consumption such as starch has dropped sharply, which is expected to be 55.34 million tons and 7.36 million tons respectively for the whole year, down 2.8% and 13.8% respectively from the same period last year. The increase in farmers' enthusiasm for planting has led to a slight increase in seed consumption, which is expected to reach 3.96 million tons for the whole year, an increase of about 4.3% over the same period last year. At the same time, feed consumption and consumption have been reduced.

(3) the price is high, showing an "N" trend as a whole.

This year, the wholesale price of potato in China shows a "N" trend of rising at first and then falling, and the price level is relatively high. Judging from the monthly changes, the price fluctuation is generally in line with the perennial law, that is, at the beginning of the year, the price continued to rise as it did at the end of last year. After the Spring Festival, due to the shortage of other alternative vegetables caused by the "overlord" late spring cold in this spring, potato prices remained high, reaching an annual high of 3.47 yuan / kg in May, up 53.3% from the same period last year. After that, the price tended to fall back, falling to 1.84 yuan / kg, the lowest price this year, in September. Since October, northern autumn potatoes have been on the market one after another, but Gansu and other places have experienced the most serious continuous high temperature weather in nearly 60 years in summer. Ningxia, Inner Mongolia, Heilongjiang and southwest regions have also been affected to varying degrees, and the market supply is relatively in short supply. The average price of potatoes has rebounded for three consecutive months, with an average price of 2.35 yuan / kg in December, up 7.9% from the previous month and 15.2% from the same period last year. Judging from the changes in annual prices, the average annual price of potatoes in 2016 was 2.40 yuan / kg, up 13.2 percent from the same period last year, the second highest level in the past five years.

(4) International trade surplus and deficit exist at the same time.

Affected by the relatively high price of domestic potatoes, the export power of potatoes this year is insufficient, the export volume has decreased, and the export volume is basically the same; at the same time, with the continuous improvement of the popularization rate, planting technology and processing level of virus-free seed potatoes, the quality of processed products such as potatoes and French fries in China has continued to improve, and potato imports have decreased. According to customs data, the country's cumulative exports from January to November were 396000 tons, down 4.3 percent from the same period last year, exports were 238 million US dollars, up 0.6 percent from the same period last year; imports were 136100 tons, down 2.0 percent from the same period last year, and imports were 165 million US dollars, down 3.7 percent from the same period last year; and the trade surplus was 73 million US dollars, up 10.3 percent from the same period last year. In the same period, the country exported a total of 524.91 tons of potato starch, with exports of US $588600, down 15.3% and 17.7% respectively over the same period last year; imports of 37200 tons and US $28 million, down 38.6% and 35.1% respectively over the same period last year; and the trade deficit was US $27.1574 million, down 35.4% from the same period last year. Exports for the whole year are expected to be about 500000 tons, down 4.2 percent from the same period last year, and imports are about 330000 tons, down 31.5 percent from the same period last year.

II. Prospect of Potato Market in 2017

(1) production continues to develop steadily

With the acceleration of the process of agricultural supply-side structural adjustment in China, it is expected that the conversion of corn and other food crops to potatoes in the "sickle bend" area will continue to increase; at the same time, in view of the high overlap between the main potato producing areas and the poor counties in China, under the background of the continuous increase in precision poverty alleviation and the integrated development of the primary, secondary and tertiary industries, the potato planting area in the northwest and southwest and other poor and suitable areas may continue to increase. Therefore, in the absence of large-scale and deep diseases, potato production across the country will continue to maintain rapid development, with an estimated planting area of 86.96 million mu in 2017, and total output may reach a record 96.82 million tons, an increase of 2.0% and 5.2% respectively over the same period last year.

(2) steady growth in consumption

Historical data show that food consumption accounts for less than 70% of the total potato consumption, but it is still the most important part of potato consumption in China. From the perspective of consumption trend, under the circumstances that the total population is basically stable and the overall supply of vegetables is balanced, the daily consumption of potato residents will remain basically stable, while the consumption of groups such as farmers going out to work will continue to shrink with the increase of returning to their hometown to start businesses and return to work, although many consumption channels such as fast food and snack food may increase, but the pulling effect on the whole consumption is limited. Affected by sufficient market supply, the shortage of raw materials in the starch and other processing industries is expected to be alleviated quickly. coupled with the in-depth promotion of the processing staple food strategy, potato processing consumption may increase significantly, and the annual processing volume is expected to return to 8.23 million tons, an increase of 11.8 percent over the same period last year. With the further improvement of the popularization rate of original, primary and secondary virus-free seed potato in China, the consumption of seed potato will continue to increase. At the same time, affected by the degree of harvest mechanization and the continuous improvement of production level, the damage rate and commodity rate continue to increase, the proportion of broken sweet potatoes has decreased, and feed raw potatoes may be reduced.

(3) Operation of price fluctuations

From the law of price operation, most of the potato market price highs appear in April-May every year, while the years that break through the historical highs appear in the spring of 2010, 2013 and 2016 respectively, showing the characteristics of a breakthrough in three years. It is expected that the fluctuation of potato price in 2017 will still follow the law of perennial fluctuation, and the overall situation will be fluctuating. Specifically, it can be divided into two stages: the first stage is from January to April 2017, in which the market is mainly to digest 2016 stock potatoes, and the holiday effect, spring break and other factors will support the potato price to maintain a high level. The second stage is from May to December, with precocious potatoes coming on the market one after another, storers will accelerate the sale of goods in mid-late May and early June, and prices may fall quickly, while a large number of potatoes will be on the market in the late autumn, and the market supply will increase greatly. downward pressure on prices will continue to increase. Therefore, if there are no large-scale, wide-range, heavy impact and other epidemics and meteorological disasters in 2017, it is expected that prices will fluctuate significantly after the concentrated listing of potatoes in autumn in the north in the second half of the year.

(4) benign development of international trade

With the deepening of economic and trade cooperation between China and its neighboring countries, especially those along the "Belt and Road Initiative" route, it is expected that potato export trade will continue to grow steadily, especially in areas such as Gansu, where the natural and technical conditions for variety breeding are more prominent. The export advantage of seed potato will be further revealed. At the same time, the export of fresh frozen potatoes and French fries, potato chips and their freeze-dried products with excellent processing characteristics will continue to increase. Under the protection of the "double evils" policy, the domestic market of potato starch is gradually improving, but when this policy expires in the next two years, it will have an uncertain impact on the stable development of the industry; at the same time, the export trade of potato starch may be further reduced by the impact of the low price of cassava starch in Southeast Asian countries such as Vietnam, while the import of high-quality starch may continue to grow. On the whole, China's international potato trade will still maintain a good development trend, and it is expected that the export volume for the whole year will return to the level of 600000 tons, a substantial increase of about 20% over the same period last year.

Risk hints and related suggestions

First, the risk of concentrated sale of potatoes will be highlighted next spring. At present, with the release of potato market demand, coupled with the reduction of New Year's Day, Spring Festival effect and other vegetable alternative consumption, prices will continue to pick up slowly in the short term. However, the market generally believes that due to the serious disaster in 2016, the reduction of commercial potatoes, the shortage of goods, the expected increase in prices in the later period, the strong willingness of producers and dealers to hoard goods into storage and cherish sales, and the inventory to maintain a high level, and with the change of storage conditions of potatoes in spring next year, the possibility of centralized sales will increase, and prices may also fluctuate greatly. It is suggested that we should pay close attention to the market trends, balanced listing and timely sale of potatoes, so as to prevent the recurrence of market fluctuations and unsalable difficulties caused by a large number of centralized listings.

Second, the risk of imbalance between supply and demand of potatoes is increasing day by day. Since 2015, the state has vigorously promoted the staple food strategy of potato processing, and has successively carried out pilot projects in 10 provinces and regions, including Beijing, Hebei and Gansu, which has vigorously promoted the development of local potato production. However, the potato is still the best choice for the agricultural structural adjustment in the "sickle bend" area and the accurate poverty alleviation strategy in the western region. It is expected that the potato production area in China will increase greatly in the future. At the same time, the popularization rate of virus-free seed potato continues to increase, irrigation and other water and fertilizer conditions and cold chain infrastructure continue to improve, potato production capacity will be greatly enhanced, and market supply will increase significantly, but the growth rate of consumption will be relatively slow. The possibility of breaking the balance between supply and demand in the market increases, and the risk of large price fluctuations is highlighted. It is suggested that in the adjustment of agricultural structure, we should promote the rotation of grain and potato in an orderly manner, guide farmers to make a rational layout, and not blindly follow the trend of planting, which can not only promote soil fertility recovery and epidemic disease prevention and control, but also slow down market fluctuations.