Wholesale potato prices in the Canary Islands have halved this summer, with producers warning that early UK imports could push many farms into losses. Local growers, particularly in Tenerife’s northern midlands, are struggling to move millions of kilos of stock as demand stalls and storage facilities fill up.
Prices Drop Below Viable Levels
Wholesale prices have slipped from €1.20/kg (US$1.30) earlier in the season to just €0.60–0.70/kg (US$0.65–0.76), according to figures from the Canary Islands Government’s Department of Agriculture. Farmers say these levels fall well below average production costs, even when factoring in POSEI subsidies—the EU’s special aid programme for outermost regions, which provides support both by cultivated area and by kilos sold.
For many growers, profitability only begins at around €1.00/kg (US$1.08). “Right now, we’re selling at a loss. If the market doesn’t rebalance, some farms won’t make it through the season,” one Tenerife producer told local media.
Millions of Kilos in Storage
The problem is not one of supply, but of demand. Producers and officials estimate that millions of kilos of potatoes are being held in storage—some in refrigerated warehouses, others in non-cooled sheds. August is traditionally a slow month for sales, but this year’s slump is particularly severe.
Canarian growers argue that import timing is critical. If UK shipments arrive in early September—as opposed to mid-September, the usual pattern—local potatoes could still be sitting unsold. That overlap would apply further downward pressure on prices, potentially forcing farmers to liquidate stock at deep losses.
UK Imports Add Competitive Pressure
The Canary Islands rely heavily on imported staples, but potatoes are a politically sensitive crop. Imports from the United Kingdom typically arrive in the autumn to cover late-season demand. While those shipments are usually cheaper, they also undercut the local harvest at a time when producers most need sales.
According to Eurostat trade data, the UK exported over 40,000 tonnes of seed and table potatoes to Spain in 2023, with the Canaries taking a sizeable share. Although volumes are modest in global terms, the price effect is sharp in a contained island market.
Farmers are calling for government measures to stagger imports until local stock clears, but officials have not confirmed whether such steps will be taken this year.
Shopper Impact and Retailer Dilemma
For shoppers, lower wholesale prices might eventually trickle into supermarket promotions. But the benefits are uneven: chains that lean on imports may gain more flexibility, while retailers committed to local sourcing risk strained supplier relations.
For suppliers, the issue goes beyond a single crop cycle. Prolonged losses could push smaller farms out of business, leaving the region more reliant on imports in the long run. That dynamic mirrors wider European debates about food security and supply resilience, particularly in high-inflation environments.
GSN analysis
- Supply-demand mismatch: This is a textbook case of overhang—bumper local yields colliding with seasonally weak demand.
- Policy risk: Unless policymakers intervene to manage import timing, producers face another sharp margin squeeze.
- Retail pressure: Supermarkets may be tempted to lean on imports for cost competitiveness, but reputationally this risks a backlash from local producers.
Outlook: The September Test
The next three weeks are decisive. If UK imports are delayed until mid-September, local stocks may clear enough to stabilise prices. If not, growers expect the market to stay under pressure through October. With the Christmas consumption cycle looming, the question for retailers is whether local potatoes will still be available—or whether imports will dominate the shelves.
