Gain report: Overview of Potato Supply and Demand in Russia

Russia is a huge producer of potatoes, and is typically the third largest potato producer in the world after China and India. In 2012, Russia produced 29.5 million metric tons (MMT) of potatoes.

At present only 13 percent of domestic potatoes are produced by agricultural enterprises, with 8 percent produced by private farms, and the other 79 percent produced by households (backyard production).

Potato production is not concentrated in any one area in Russia, although during the past few years commercial production of potatoes at large agricultural enterprises and private farms in Moscow and in some Western provinces of the Central Federal District has increased. The potato crop in 2013 is expected to be down as a result of excessively rainy weather, especially at harvest.

Russia is largely self-sufficient in potato production, and imports of potatoes remain relatively small, and in 2000-2010 never exceeded 0.6 MMT a year. The highest year of imports was in 2011, when 1.4 MMT were imported after the severe drought of 2010 which decimated Russia’s potato crop. Potato importers are usually larger retail companies that focus on serving customers in large metropolitan areas such as Moscow and St. Petersburg.

Since the beginning of 1990s, production of potatoes in Russia has been gradually decreasing (with significant fluctuations depending on weather). During the Soviet Union, 34 percent of Russia’s potatoes were produced in specialized state and collective farms. After the breakup of the Soviet Union and collapse of these specialized state and collective farms in 1991-1992, potato production in Russia dropped.

However, an expansion in household (backyard) production in the early 1990s was able to compensate for this decline and was able to meet domestic demand and return production to levels of before the breakup of the Soviet Union. Although potato yields in these household farms were lower than in the former state and collective farms, storage was much better and as a result crop losses decreased significantly.

In the latter half of the 1990s, production began to fall again as a result of falling consumption of potatoes in Russia, but since the late 1990s, potato production in Russia has been relatively stable at between 27 and 30 MMT per year.

Production in Russia remains dominated by household (backyard) production, which in 2012 still provided nearly 80 percent of all production. The source of production, though, has shifted gradually towards more production in large agricultural enterprises and private farms. For instance, the share of agricultural enterprises and private farms in the total production of potatoes increased from 8.4 and 2.8 percent in 2005, to 13.1 and 8 percent respectively in 2012.

Increased production at larger scale farms has been driven by growing demand from producers of snacks (chips), other value added potato products, and large retail companies focused on selling high-quality potatoes in urban markets such as Moscow and St. Petersburg. These agricultural enterprises are the ones that are increasingly purchasing modern equipment, using improved seed potatoes, and are able to invest in more modern storage facilities. Agricultural enterprises produce potatoes for processing and for retail sale and some of these enterprises have constructed their own processing facilities, while others sell potatoes to large food (snack) companies.

Crop 2013 Estimate

There is no official estimate of Russia’s potato crop in 2013 and the Russian Ministry of Agriculture follows the potato harvest progress in agricultural enterprises only. In 2013, the weather was not favorable for the potato crop as a cold and rainy spring in Central European Russia delayed potato planting, impacting yields. Also, very heavy rains in September all over European Russia postponed harvesting, and in some provinces even made machine harvesting impossible (i.e. harvesters could not move in the fields). While the potato harvest is typically over by the end of September, this year it has continued through mid-October. As of October 28th, 2013, agricultural enterprises harvested 3.4 MMT of potato from 178,600 hectares (which is 93 percent of planted area). This is 17 percent lower than potato production in agricultural enterprises in 2012 (4.1 MMT), and 19 percent lower than in 2011 (4.2 MMT). There are no estimates of potato production in household backyards and in private farms, and it is possible these smaller farms were not as impacted by the rainy weather at harvest.

Assuming this, FAS/Moscow estimates Russia’s total potato production in 2013 at 28.3 MMT, which will be close to the last 5-year average of 28.7 MMT (the average includes the low 2010 crop of 21.1 MMT).