Frozen Potato Products Situation Outlook for Selected Countries by inr11138

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									                              Frozen Potato Products Situation & Outlook for Selected Countries

The world’s leading exporter of frozen potato products is Canada, followed by the United States
and the European Union (EU), according to Global Trade Atlas statistics. Before 1998, the
United States was the largest exporter of frozen potato products, but Canada took over first place
in 1998 and has been the leading exporter since then. From 1997-2003, world exports of frozen
potato products had mixed results. Canadian exports more than doubled, EU exports increased
an estimated 50 percent, and U.S. and other key countries’ exports remained flat. The Canadian
share of world exports of frozen potato products grew moderately over the last 5 years, while the
U.S. share fell sharply, and all other key exporters’ shares remained fairly stable. Specifically,
U.S. shares of world exports of frozen potato products dropped from 42 percent in 1997 to 29
percent in 2002. The global trend of healthier diets is expected to limit production and export
expansion of frozen potato products in most countries, except China, over the next few years.
                          Major Exporters of Frozen Potato                                                                         Top Exporters’ Shares of Frozen Potato
                                     Products                                                                                               Products Exports*
                                   Canada          USA       EU        Argentina              NZ      Australia          China                              Canada               USA              EU                  Argentina
                       900                                                                                                                                  NZ                   Australia        China
                                                                                                                                            50%
                       800
                                                                                                                                            45%
                       700
Thousand Metric Tons




                                                                                                                                            40%
                       600                                                                                                                  35%
                       500                                                                                                                  30%
                                                                                                                                   Share




                       400                                                                                                                  25%
                                                                                                                                            20%
                       300
                                                                                                                                            15%
                       200                                                                                                                  10%
                       100                                                                                                                   5%
                         0                                                                                                                   0%
                                 1997         1998          1999          2000     2001                   2002           2003*                         1997              1998          1999       2000               2001          2002
                       Note: Under HS #200410                        Calendar Year                                                                                                     Calendar Year
                       *2003 EU data not available                                                                                          *Under HS #200410
                       Source: Global Trade Atlas                                                                                           Source: Global Trade Atlas



    Major Producers’ Share of World Fresh                                                                                          Major Producers’ Share of World Frozen
        Potato Production by Quantity                                                                                                  Potato Production by Quantity
                                                                                                                                                                            USA          Canada           Netherlands
                                             China          Russia             India          USA       Canada
                                                                                                                                            60%
                       25%
                                                                                                                                            50%
                       20%
   Share




                       15%                                                                                                                  40%
                                                                                                                                    Share




                       10%                                                                                                                  30%
                         5%
                                                                                                                                            20%
                         0%
                                   1994

                                            1995

                                                     1996

                                                              1997

                                                                        1998

                                                                                       1999

                                                                                               2000

                                                                                                        2001

                                                                                                                  2002

                                                                                                                            2003




                                                                                                                                            10%

                                                                     Calendar Year                                                            0%
                                                                                                                                                      1997       1998           1999    2000    2001         2002           2003    2004
                       Source: Food and Agriculture Organization (FAO) of the United Nations                                                                                            Calendar Year
                                                                                                                                            Source: Food and Agriculture Organization (FAO) of the United N ations




Canada

Canada is the largest exporter and second largest producer of frozen potato products in the world.
From 1997-2002, Canada’s industry went through a significant growth phase. Industry analysts
report that Canada’s major production expansion is over, but its exports are expected to continue

April 2004                                                                                                                1                               World Horticultural Trade &
                                                                                                                                                          U.S. Export Opportunities
to rise, although more modestly. In 2003,
Canada’s exports of frozen potato products                                                                                                             Canada’s Exports of Frozen Potato
                                                                                                                                                           Products to Top Markets*
soared to 900,000 tons, more than double the                                                                                                                                        USA           Japan      Mexico
amount in 1997. This is partly due to output                                                                                              900

from a new Simplot plant in Manitoba in                                                                                                   800
                                                                                                                                          700




                                                                                                         Thousand Metric Tons
2003, as well as expanded exports to Mexico
                                                                                                                                          600
in recent years after Mexico eliminated its                                                                                               500
tariff-rate quota on fries under NAFTA.                                                                                                   400

Canada’s share of world exports of frozen                                                                                                 300

potato products peaked at 46 percent in 1999.                                                                                             200
                                                                                                                                          100
They dropped slightly to 43 percent in 2002,                                                                                                           0
but were still much larger than other                                                                                                                  1997           1998            1999           2000      2001           2002    2003
                                                                                                                                                                                                 Calendar Year
countries’ export shares.         For more                                                                                             *Under HS200410
                                                                                                                                       Source: Global Trade Atlas

information on Canada, see attaché report
#CA3067.

China

China is the largest potato producer in the world and produces over 20 percent of the world’s
potatoes, according to statistics by the Food and Agriculture Organization (FAO) of the United
Nations. China is both a growing market and competitor for potatoes and products, and is one of
the few countries expected to increase production and trade of frozen potato products over the
next few years. About 5-10 percent of China’s potatoes are processed, and China has been
investing in the frozen potato fry industry in order to take advantage of the growth in its
domestic fast food industry.


                             China’s Imports of Frozen Potato                                                                                                Japan’s Imports of Frozen Potato
                              Products from Top Suppliers*                                                                                                    Products from Top Suppliers*
                                         USA        New Zealand     Canada   Netherlands                                                                                       USA               Canada           Australia
                                                                                                                                                       300
                        60

                                                                                                                                                       250
                        50
                                                                                                                                Thousand Metric Tons
Thousand Metric Tons




                        40                                                                                                                             200


                        30                                                                                                                             150


                        20                                                                                                                             100

                        10                                                                                                                             50

                         0                                                                                                                              0
                          1997          1998            1999          2000        2001     2002   2003                                                   1997           1998              1999         2000        2001        2002    2003
                                                                  Calendar Year                                                                                                                   Calendar Year
                       *Under HS200410                                                                                                                 *Under HS200410
                       Source: Global Trade Atlas                                                                                                      Source: Global Trade Atlas




From 1997-2003, China’s imports of frozen potato products have grown exponentially, making it
a very attractive market. In the next few years, analysts expect China’s imports and exports to
continue growing. However, the situation over the longer term is unclear, because China’s plans
to expand production could be limited by land and water constraints. China is the third largest
market for U.S. frozen fries by quantity, and is expected to continue growing in importance as an
import market. For more information on China, see attaché report #CH3109.

April 2004                                                                                        2                                                                  World Horticultural Trade &
                                                                                                                                                                     U.S. Export Opportunities
 Japan

 Japan is a key importer of frozen potato products. Japan’s imports of frozen potato products
 peaked in 1999 and have dropped every year since then. Despite this, exporters remain very
 interested in this market, and analysts expect this market to recover within the next few years.
 For more information on Japan, see attaché report #JA3082.

 Korea

 From 2002-2003, Korea’s imports of frozen potato products fell 20 percent from all suppliers.
 However, they have risen 12 percent from 1997-2003. The United States is the largest supplier
 of frozen potato products to Korea, with 80 percent of the import market share by quantity.
 Canada is the next largest supplier, with a 15-percent share. However, over the last 7 years, the
 U.S. share has slowly been declining from 90 percent to 80 percent, while Canada’s share has
 slowly been increasing. Korea is the fifth-largest market for U.S. frozen fry exports by quantity.
 For more information on Korea, see attaché report #KS3028.



                            Korea’s Imports of Frozen Potato                                                         Netherlands’ Exports of Frozen Potato
                             Products from Top Suppliers*                                                                  Products to Top Markets*
                                                    USA     Canada   Australia                                                                            Intra EU     Sweden   Saudi Arabia
                       45
                                                                                                                             1200
                       40

                       35                                                                                                    1000
Thousand Metric Tons




                                                                                                      Thousand Metric Tons




                       30
                                                                                                                              800
                       25
                       20                                                                                                     600
                       15
                                                                                                                              400
                       10

                        5                                                                                                     200
                        0
                        1997           1998          1999        2000            2001   2002   2003                              0
                                                             Calendar Year                                                       1997           1998            1999       2000      2001      2002   2003
                       *Under HS200410
                       Source: Global Trade Atlas                                                                            *Under HS200410                           Calendar Year
                                                                                                                             Source: Global Trade Atlas




 Netherlands

 The Netherlands is a major producer and exporter of frozen potato products. Production has
 remained fairly flat over the last 5 years. Drought in 2003 reduced potato production, and frozen
 fry production is expected to be substantially lower.

 Dutch exports to the world, including EU countries, rose 16 percent from 1997-2003. Dutch
 exports to non-EU members rose 8 percent to 206,000 from 1997-2003. Over 80 percent of its
 exports are traded with other EU members. For more information on the Netherlands, see
 attaché report #NL3039.




 April 2004                                                                                    3                                           World Horticultural Trade &
                                                                                                                                           U.S. Export Opportunities
United States
                                                                                                                                               U.S. Net Trade in Frozen Potato
The United States is one of the world's top                                                                                                               Products
producers, exporters, and importers of frozen
                                                                                                                                                                        Exports      Imports       Net Exports
potato products. From 1997-2002, production
                                                                                                                                         1,000
and exports have remained fairly flat, due




                                                                                                                Thousand Metric Tons
                                                                                                                                          800

largely to healthier food trends in many                                                                                                  600
                                                                                                                                          400
countries, while imports have grown steadily.                                                                                             200

In 2000, the United States became a net                                                                                                     0
                                                                                                                                         -200
importer of frozen potato products, and this                                                                                             -400
trade deficit has been growing since.                                                                                                              1994   1995   1996     1997     1998     1999   2000    2001    2002    2003

                                                                                                                                                                                  Calendar Year


From 1994-2003, U.S. exports of frozen potato                                                                               Source: Bureau of the Census, DOC


products grew over 50 percent. However, U.S.
exports of frozen potato products fell 13 percent from 2002 to 2003. Over the last 10 years, U.S.
frozen fry exports climbed 25 percent to Japan, soared about 300 percent each to Mexico and
Canada, rose exponentially to China, and jumped 32 percent to Korea. However, healthier diet
trends and concerns of BSE linked to tallow used in making potato fries are expected to dampen
future U.S. production and export expansion.


         U.S. Market for Frozen Potato Products                                                                    U.S. Frozen Fry Exports to Top Markets
                                      Production      Consumption         Exports       Imports
                       4,000                                                                                                                                Japan       Mexico      China    Canada       Korea

                       3,500                                                                                                             400
Thousand Metric Tons




                                                                                                                  Thousand Metric Tons




                       3,000                                                                                                             350
                       2,500                                                                                                             300
                       2,000                                                                                                             250

                       1,500                                                                                                             200
                                                                                                                                         150
                       1,000
                                                                                                                                         100
                        500
                                                                                                                                          50
                          0
                                                                                                                                           0
                               1997   1998         1999       2000        2001       2002         2003
                                                                                                                                            1994     1995    1996       1997      1998      1999   2000     2001    2002     2003
                                                          Calendar Year

                                                                                                                                                                                  Calendar Year
         Note: 2003 production and consumption not available. A conversion factor of 0.55 is used to estimate
         frozen potato fry production based on the potatoes utilized for processing.
         Source: Economic Research Service, USDA and Bureau of the Census, DOC                                              Source: Bureau of the Census, DOC




(The FAS attaché report search engine contains reports on the selected vegetable industries for
selected countries. For information on production and trade, contact Shari Kosco at 202-720-
2083. For information on marketing, contact Ted Goldammer at 202-720-8498.)




April 2004                                                                                                 4                                          World Horticultural Trade &
                                                                                                                                                      U.S. Export Opportunities

								
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