Brasil: Brazil focuses its potato production on the domestic market

The sector’s productivity has been increasing, due to the use of more productive varieties and new technologies related to irrigation, nutrition, soil preparation, and the use of quality potato seeds. Most of this production is sold fresh and nearly 25-30% of it is destined for industrial processing.

This crop is of great socio-economic importance in the country. Brazil has nearly 2,000 potato producers and the activity generates more than 30,000 direct and indirect jobs. In addition, the potato production chain plays a very important role in the country’s economy, with a GDP of between 4,000 and 5,000 million reais.

However, the sector faces great challenges to deliver a quality product to the consumer table. The entire production process (from choosing the right potato seeds to harvesting and washing the product) is fundamental to achieve this. This is of paramount importance as, in the face of fierce competition imposed by the globalization of markets, excellent quality has become the main criterion to add value to this product.

Internal market

Potato cultivation in Brazil is basically focused on the domestic market and it is directly linked to the supply and demand of the market. In this regard, the profitability ratio for the producer has suffered significant volatility. According to the CEPEA survey carried out between 2011 and 2018, in 2017 and 2018 prices remained below production costs. Historically, producers that have better management and use of technologies achieve better cost-effective performance.

One of the main challenges of Brazil’s production system as a whole, including potato production, is that the low purchasing power of a large part of the population compromises their access to these products. This leads to a retraction of market demand and, consequently, to a disorganization of the marketing flow which is compounded by the inflows of imported products.

The value of potatoes could be increased if Brazil had a higher consumer demand for the market to classify potatoes in terms of their culinary properties (the intrinsic quality of the varieties), and if the country implemented strategies that other countries with a higher per capita consumption have, such as improving the way the product is presented in supermarkets, its traceability, and brands, among other things.

Source: grupocultivar.com.br / argenpapa.com.ar