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![]() Rooting For Potato (1)
Rosalie B. Bernardino Potatoes are tuber vegetables that originated in South America. They are one of the most nutritious foods in the world, containing high amounts of carbohydrates, potassium, iron, protein, fiber, phosphorous, and vitamins B1, B6 and C. Based on a 100-gram weight, potatoes are low in calories at 77 as compared to rice and pasta with 138 and 129, respectively. They are also low in fat and contain more potassium than a banana and more iron than any other vegetable. PerformanceProduction. Production during 1996-2000 declined by an average of 6% yearly as area planted contracted by 4% per annum. A sharp decline was registered in 1998 as area planted slipped by 1,500 hectares. In 2000, production reached 63,520 tons. The bulk came from Benguet (67%), Davao Sur (14%), and Bukidnon (10%). The average yield was less than 13 tons per hectare, rather low by global benchmark.
P-Preliminary For the past five years, 70% of the total potato supply has been utilized for food, 25% for processing, and the rest for seeds, feeds and wastes. Per capita consumption was barely one kilo per year. Trade. The country is a net importer of potatoes. Imports grew by almost 18% annually from 25,359 tons ($25.5 million) in 1996 to 47,053 tons ($33.8 million) in 2000. Much of the growth came from imports of prepared/preserved potatoes, which significantly grew from only 36 tons ($112,000) in 1996 to 29,587 tons ($19.8 million) in 2000. Imports in 2000 consisted mainly of prepared/preserved (63%), starch (11%), and frozen (11%). Major sources by quantity were the USA at 66% and Canada at 11%. For the first six months of 2001, imports already reached 22,978 tons ($15.8 million). By contrast, exports are relatively small and fluctuating, ranging from a low of 8 tons ($36,000) in 1996 to 482 tons ($1.2 million) in 1998. Exports totaled 407 tons in 2000, with Singapore and Korea as the major destinations at 53% and 37% by volume, respectively. For the first half of 2001, exports stood at 76 tons ($114,000).
* As of June Demand. Potatoes have a variety of uses:Fresh. Used as ingredient in viands, soups, salads and bakery products. They can also be mashed, hashed, minced, boiled or roasted. Processed. They are made into chips, flakes and french fries, or starch for use by textile, soap and paste companies. Other products derived from potatoes are sugar, for pharmaceutical preparations; and vinegar, alcohol, and wine for beverages. Processed potato can be a profitable business venture. Potato-based snackfood manufacturers and fastfood chains grew at about 15-17% and 15-20% per annum, respectively, from 1993-1998. Snackfood. The snackfood industry has a huge market - 60% of the population or those who are 30 years old or younger. According to industry sources, there is a 15%- 20% recovery rate when fresh potatoes are processed into chips, or one kilo of chips for every 5 to 6.5 kilos of potatoes. In 1998, the chips industry consumed about 50,000 to 70,000 cases per month or about 700-800 tons per month of fresh potatoes. This would produce 1,260 tons-1,920 tons of potato chips per year. Industry sources said that given an adequate supply of potatoes, a manufacturer can expand operations from 20 tons-80 tons a day. However, there are some players who just import ready-to-eat chips and repack them for the local market. The biggest player in the snackfood industry is Universal Robina Corporation, with an estimated market share of 51% in 1999. There are 34 importers of potato snacks or ready-to-eat potato products in 1998 (National Statistics Office -NSO). The key importers are Alliance Global Group, Benby Enterprises, Inc. and Rustan's Marketing Corp.
Source: UA&P-Center for Food and Agri Business Databank Fastfood and Restaurants. Demand for french fries continues to increase as the fastfood industry grows. French fries consumption of fastfood chains, however, varies per branch depending on location, seating capacity, store hours, etc. Consumer preferences also play an important part like size of servings, saltiness, and crispiness. Some fastfood chains can consume an average of only 20 to 25 kilos of french fries per day per branch. Others have a weekly average consumption of 35 cases (1 case = 13.64 kilos) or approximately 70 kilos per day. In 1998, the Philippines had 44 importers of french fries (potatoes, cooked/uncooked by steaming/boiling in water, frozen), according to the NSO. Locally processed potatoes are also consumed in hotels and restaurants. A key player in the restaurant industry indicated that their fresh potato consumption averaged about 2 tons per month per branch. Impediments to GrowthThere is a large market for potatoes. Local production, however, cannot meet the required volumes and quality of potatoes especially for processing. Constraints to growth include: limited supply of quality planting materials, low quality of potatoes (content and size), lack of technical know-how of farmers, inadequate infrastructure and other farm support services, and limited credit access. ProspectsWith the growth in "eating out" (e.g. fastfood and restaurants), demand for fresh and processed potatoes will continue to increase. Industry sources indicate that demand for potato chips alone is projected to increase by 10% annually in the next five years. Fastfood and snackfood manufacturers will continue to rely on imports until there are significant improvements in the production and quality of locally produced potatoes. Research should be directed at developing or finding varieties that are not only suitable to local conditions but also satisfy requirements for processing. The Mindanao Agricultural Research Center has been experimenting on local seed propagation. If successful, this would help reduce dependence on imported seeds. References: UA&P-Center for Food and Agri Business Databank. 1.* This industry brief was published by the Manila-based University of Asia and the Pacific, Center for Food and Agribusiness in the September 2001 issue of the Food and Agribusiness Monitor, primarily for a Philippine audience. This industry brief is being made available to Canadian businesspeople in order to provide basic market information should there be export interest in relevant agrifood commodities.
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