South Africa’s potato market is experiencing a severe downturn as farmers contend with dwindling returns and prices that are now well below cost. The collapse comes on the back of a bumper harvest, expanded plantings, and improved growing conditions across the country.
In recent weeks, per-kilogram prices at fresh produce markets have dropped to between R3.50 and R4, which is about R2 below estimated production costs and nearly 50% lower year on year, according to FreshPlaza.
It also reports that good yields and a mild winter combined with aggressive planting drove a glut, suppressing prices further into October.
Higher yields
Multiple regions saw increased hectares under potato cultivation this season, spurred by favourable weather conditions and strong seed availability. In particular, Limpopo is projected to market an additional 12 million 10kg pockets between July and December 2025.
Overlapping harvest periods between production regions have intensified the surplus, pushing more potatoes into markets at once.
Potatoes South Africa noted that the rise in both hectares planted and yields, combined with distribution timing bottlenecks, created a supply surge that outpaced demand.
Price outlook and risks
Agricultural analysts expect prices to continue falling through October before stabilising at bottom levels. FreshPlaza warns that pricing could settle at around R3.50 per kilogram for the remaining months of 2025. At these levels, many producers are operating at a loss.
Speaking to Moneyweb’s RSG Geldsake, FP Coetzee, Potatoes SA’s manager of information and regional services, notes concern that some farmers may not survive the current price slump.
“There is definitely a chance that some farmers will not make it,” he says.
“It depends on how your business is structured and whether you have the financial ability and resources to withstand a difficult season. If you didn’t save money during the good years, a year like this can certainly force you to stop farming.”
Implications for producers and consumers
For potato farmers, the current cycle raises the spectre of exits from the industry, particularly for those unable to absorb high input costs under low returns.
Consumers, by contrast, may benefit from temporary relief in food inflation.
Grow Fresh Produce Agents has called on retailers to pass on the lower prices. It points out that since potatoes are mostly consumed fresh in South Africa, there’s little ability to carry stock over to buffer future fluctuations.
Producers and industry bodies are now focusing on how best to manage future volatility, whether via better coordination of harvest timing, regional planting decisions, or financial hedges to protect against price collapses. – moneyweb.co.za
