Rising potato prices across South America

The countries of South America are in the enviable position to typically be fully self-sufficient in terms of potato supply. This, however, also makes them extremely susceptible to price fluctuations, and recently, prices have tended to rise.

This year, the Pacific Ocean currents reversed their dynamics, and the El Niño phenomenon became the prevailing force in the southern continent. This meant an increase in rainfall for the more southern regions and the opposite for the more equatorial countries. Common to all, in any case, after several years of the La Niña phenomenon, was a disruption in what had been and what the agricultural sector had become accustomed to.

In Brazil, for example, the rains in Rio Grande do Sul caused the most terrible floods the country has ever seen, resulting in dozens of deaths, thousands of displaced people, and millions in structural and agricultural damage. The rains, both in the south where they were devastating and in the more central regions, had a considerable impact on the availability and prices of potatoes, which remained above USD 20 per 25kg bag throughout almost the entire year.

In Argentina, the incidence of one of the coldest winters in the last 60 years had a similar effect on crops and, by extension, prices. Severe and unexpected frosts damaged much of the fields in the southeast of Buenos Aires, a key productive region, leading to an exponential increase in prices since the beginning of the year.

Uruguay was no exception and suffered both—living up to its middle ground between Argentina and Brazil—with abundant rains and terrible frosts. As a result, harvests were delayed and affected, and combined with the low availability of seed, prices soared, reaching highs of USD 46 per 25kg bag in the central market.

On the other hand, Chile experienced a lapse in local supply, which is very unusual for the country, leading to the extreme measure of importing goods from other countries in the Americas. Peru and Bolivia suffered frosts, hailstorms, and snowfalls that decimated their crops early on. And Colombia saw its plantings delayed by more than two months, pushing potato prices up by 60% above expectations.

In summary, the impact of the climate in South America this year seems to have caught the agricultural sector and consumers by surprise. Prices skyrocketed, but at the expense of quality and supply. The question is: has a new price floor been found for the product in the region?