In this monthly Frozen Potato Products update, our analysts will share valuable insights about the Frozen Potato Products industry. This month: December trade data shows that global trade volume was up 8.9% in 2022 compared to 2021, and prices were up 30.1%.
Market monitoring of frozen potato products
Market monitoring helps agri food companies to objectively evaluate their current position within the market and the development of that position. Furthermore, it helps to spot new growth opportunities and whether the market is saturated.
For the A-INSIGHTS Market Monitor, we analyze the global trade in frozen potato products on a monthly basis. Derived from local customs agencies and statistics offices, the data gives us insight into monthly trade volumes and prices for all major importers and exporters. Combined with our sector expertise, we can provide you with an up-to-date view of the developments in the global frozen potato market.
Demand recovery and bad crops push trade volumes and prices to record levels
With the full trade data for 2022 published, we can put the trading year in review. The total trade volume of 9 million tonnes shows continued growth after the COVID-impacted trade decline in 2020 and partial recovery in 2021. Volume growth in key import-supplied markets such as Japan and Spain shows that demand has continued the pre-COVID growth pace, whilst below-average crops in key production regions pushed the average trading price to a record €1.04/kg. Continued raw material shortages in North America and Europe drive a continued price increase, with the €1.26 average trading price in December 21.2% higher than the average price over the year. At the same time, demand growth appears to have accelerated compared to 2019: where the total trade volume in that year increased by 2.2% a year earlier, the 2022 trade volume of 9 million tonnes is up 12.2% compared to 2019 for an average annual growth of 3.9%.
Growth in import markets signals demand recovery whilst U.S. imports increase due to domestic supply chain constraints
The imported volume of the 5 largest importers has increased by over 10% on average, although drivers vary. The U.S. continues to struggle with domestic supply chain constraints due to a below-average harvest, driving an increase in imported product to meet demand. Most of this volume is supplied by Canada, but Belgian producers have managed to significantly increase their share in U.S. imports as well.
At the same time markets that are mostly supplied by imported product, such as Japan and Spain, show a significant increase in volume that signals continued demand growth after the COVID-impacted years of 2020 and 2021. However, continued price increases appear to have dampened demand slightly towards the end of the year, with December trading volumes only marginally higher than in 2021 (+2.8%) and lower than the average monthly volume over 2022.
European producers supply recovered demand in the EMEA region whilst Canada benefits from shortages in the U.S.
Producers in Belgium continue to increase their share in the global frozen potato trade, having supplied 1/3 of the volume imported in 2022. Interestingly, the country's monthly trade volumes show an increasing trend over the year despite the below-average harvest in the final quarter, implying that raw material is not yet in short supply. Given the strong and sequential increases in trading prices, Belgian producers are likely able to source raw materials from growing regions further away without losing too much margin. Exports by the Netherlands increased as well, albeit at a slower pace than that of Belgium. For both exporters, regional demand remains the key destination for its exports, with above-average growth in markets in the Middle East. Increased exports by Canada are predominantly destined for the U.S. but also find their way into markets in Latin America and Asia that are historically supplied by the U.S. as the latter sees exports decline.
When looking outside of the top 5 exporters, three countries stand out in terms of 2022 export performance: whilst India and China have seized the growth potential of import markets in Asia, Turkey has jumped in the gap left by European exporters exiting from the Russian market. In doing so, these countries have gained share in global exports at the cost of the U.S. and countries such as Germany, Argentina, and Poland.
Upcoming update: consumption figures for 2022 and update of demand projections towards 2026
With the full trade figures for 2022 available, our team has started working on the update of the frozen potato production and consumption volumes for 2022, as well as the update of our demand projections towards 2026. The dashboard will be updated with these figures in the first week of April, after which we will share our analysis of the 2022 developments and projected future trends in the frozen potato sector with our users.
Curious how A-INSIGHTS can help you to incorporate objective insights into your decision-making processes and how our Market Monitor will empower your perspective? Schedule a call.