Lower 2008 Potato Prices in South Africa not fully passed on to consumers

The full benefit of lower potato prices in 2008 was not passed on to the consumer, Potatoes SA (PSA) said on Tuesday.

During 2008, the producer price of potatoes dropped by 45 percent, Mark du Plessis, CEO of PSA said. However, the average retail price for a 10kg bag of potatoes dropped by only 36 percent and the price for one kilogram of potatoes by a mere eight percent. In the case of extra small or baby potatoes, the price practically remained unchanged. Du Plessis said the decrease of 45 percent in the producer price, together with a sharp increase in production costs, resulted in many producers producing potatoes below break-even point with resultant losses in 2008. "The impact thereof is already visible in the industry measured against the drop of more than eight percent in hectares planted for 2009,"he said.