Potato Conference 2 – Analysis of China’s Potato Market Situation and Reflections on the Sustainable Development of the Industry

Li Huishang, Researcher and Doctor at the Institute of Agricultural Information, Chinese Academy of Agricultural Sciences

Analysis of the Potato Market Situation in China and Reflections on the Sustainable Development of the Industry

In 2018, China’s potato market experienced the following supply-and-demand dynamics: the national total potato planting area reached 6 million hectares (90 million mu). In the northern single-cropping region, total potato production amounted to 23.9555 million tons, a year-on-year decline of 5.8308 million tons, or 19.58%—nearly a 20% drop. In the central‑eastern double-cropping region, the overall planting area contracted significantly; in Henan and Shandong, emerging production areas offer a wide range of alternative crops. Faced with last year’s low prices and sluggish sales, these regions saw a substantial reduction in planted acreage in 2018, with some localities experiencing declines approaching 50%.

In the Hubei production region, wheat is the primary alternative crop to potatoes. However, with wheat prices remaining weak in recent years and potato growers having secured modest profits last year, most farmers have opted to continue planting potatoes, resulting in a slight reduction in total acreage compared with the previous year. By contrast, the Northeast, Northwest, Southwest, and South China regions have seen relatively pronounced increases in both planted area and output. The four provinces of Northeast China, along with Gansu, Qinghai, Ningxia, Xinjiang, and northern Hebei, northern Shanxi, and northern Shaanxi, account for 50% of the nation’s total potato‑planting area.

Seasonal price fluctuations in the 2018 potato market: The annual average price was RMB 2.16 per kilogram, up 1.89% year on year, yet still 10% below the nine-year high of RMB 2.40 per kilogram recorded in 2016. Overall, prices followed a “straw hat”‑shaped pattern—rising initially and then declining—with pronounced seasonal volatility. Prices in major producing regions generally fluctuated, with peaks occurring between May and July; however, significant differences persisted across regions in both price levels and the magnitude of price swings. For instance, Sichuan’s prices stabilized at relatively high levels, while Inner Mongolia’s prices remained volatile at lower levels. The underlying drivers of these price movements are structural, regional, and seasonal imbalances between effective supply and effective demand.

In 2019, potato cultivation remained profitable; compared with other grain crops, potatoes continued to deliver relatively high profit margins, with a net income of 300 yuan per mu. While average per-mu returns have been steadily declining, the cost‑profit margin has continued to edge lower. Looking ahead: steady, sustainable development is key. Absent major natural disasters, supply and demand are expected to remain broadly balanced, with prices exhibiting typical seasonal fluctuations and little likelihood of sharp increases. Set realistic expectations: profitability and earning potential are attainable; pursue steady growth by strengthening fundamentals and proceeding methodically; advance brand building through collaboration between producers and marketers, as well as public–private partnerships; and drive transformation and upgrading by prioritizing technological innovation and leveraging data‑driven insights.

The potato industry’s development is guided by “four orientations”: addressing processing needs, meeting consumer demands, supporting environmentally sustainable agricultural practices, and responding to international market requirements. Additionally, the industry aligns its technologies, products, and markets with three key benchmarks.

Recommendations for the development of the potato industry: Closely monitor market dynamics, ensure a balanced supply schedule and timely marketing, and prevent the recurrence of sharp price swings and sluggish sales caused by large, concentrated harvests. In the context of agricultural structural adjustment, avoid blind herd behavior in crop selection; instead, promote fallow‑rotation practices in a well‑planned manner, which can help restore soil fertility, control diseases and pests, and mitigate market volatility. Extend the industrial chain by strengthening post‑harvest processing and preservation, vigorously developing the processing sector—especially high‑value, value‑added processing—to enhance product附加值 and broaden the value chain. Establish and improve a robust monitoring and early‑warning system, and bolster information services tailored to farmers. Accelerate the development of specialized cooperatives to strengthen bargaining power in the market. Mobilize societal resources and expand collaborative networks.