The population of India is growing exponentially. This means that potato consumption per person will increase substantially in the coming decades. Potatoes are part of the traditional cuisine of India. They are also nutritious and healthy and the water consumption of the crop is relatively low. This latter aspect is becoming increasingly important in India in terms of food production.
HZPC has high expectations for the Indian market. Nevertheless, we have had problems in this country in the past year. A significant element of this was the currency crisis in India. In spring 2016, the national government suddenly decided to withdraw all of the old bank notes from the market. As a result of this demonetisation, the potato trade – which is entirely based on cash – was crippled. The consequences have been clear over the past year.
This was overshadowed by an exceptionally good harvest of ware potatoes. So many ware potatoes were available, in fact, that prices tumbled. Consequently, the demand for seed potatoes was extremely limited and HZPC and its partner Mahindra had to accept a significant negative result for the joint venture for the financial year 2017/2018.
Nevertheless, we will not dwell on an incidental setback. It is already becoming clear that the Indian harvest of ware potatoes in the spring of 2018, both in terms of acreage and yield, is much lower than last year. This will have a positive impact on the demand for seed potatoes. As a result, the joint venture expects a normal year and a more satisfactory result.
In its one-hundred year history, HZPC has gained a great deal of experience of volatility. We stay calm, even when faced with unexpected dips.
We believe that India could be a very promising market in the future and we have also shown that our company is focussing on the long term.
HZPC has now tested six strong varieties in India, which have been approved and protected. We expect to be able to develop these varieties to an annual turnover of 20,000 tons of seed potatoes in five years.