Potato crunch: Worst Japan harvest in 34 years bites snack makers' shares

Koike-Ya

11/04/2017 10:25

By Ayai Tomisawa 
    TOKYO, April 11 (Reuters) - Japan's potato chip lovers, 
beware: Your favorite snacks may become harder to find. 
    The country's worst potato harvest in at least 34 years has 
prompted major snack makers to halt production of several types 
of snacks. 
    The news hit share prices on Tuesday of Calbee Inc  2229.T , 
which makes about half of Japan's potato snacks including 
"Consonme Punch," and Koike-ya Inc  2226.T , both of which 
tumbled to two-month lows. 
    Bad weather is the main reason behind the shortage.  
    Typhoons and flooding last August swamped Japan's 
northernmost main island of Hokkaido, which produces 80 percent 
of Japan's potatoes, leading to the country's smallest harvest 
of spring-planted potatoes since 1983, when the agriculture 
ministry started keeping records. 
    Calbee, which imported about 15 percent of its potatoes from 
the United States in 2015, boosted imports last year to try to 
meet the shortfall. 
    But it was difficult to get a sustainable supply of potatoes 
so it decided to temporarily halt production of 15 products and 
permanently stop 18 items. 
    Koike-ya, which makes the popular "Karamucho" spicy potato 
snack, said it was temporarily suspending nine products and 
permanently ending seven snack items. 
    Its stock tumbled 3.5 percent to 4,200 yen on Tuesday while 
Calbee dropped 1.2 percent to 3,760 yen.  
    Both companies declined to comment on the possible impact of 
 the decisions on their earnings. 
    Retail potato prices have also risen, climbing 8.6 percent 
in 2016. 
    They've been rising nearly 20 percent every month since last 
October, according to the Ministry of Internal Affairs and 
Communications. 
    In February, potato prices jumped 22.4 percent on the year. 
In Tokyo, 1 kg of potatoes cost 402 yen ($3.60), up from 336 yen 
in the same month a year ago. 
. 
 
($1 = 110.6700 yen) 
 
 (Reporting by Ayai Tomisawa; Editing by Malcolm Foster and Kim 
Coghill) 
 ((ayai.tomisawa@thomsonreuters.com; 81-3-6441-1875; Reuters 
Messaging: ayai.tomisawa.thomsonreuters.com@reuters.net)) 
 
Keywords: POTATO JAPAN/SUPPLY