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Report: Potato Market to See Short-term Slowdown

According to a new Rabobank report, the U.S. potato sector is expected to experience a slight slowdown in demand before it recovers in 2010 -- when economic growth is expected again.

"While the short-term outlook for the U.S potato sector is at best neutral, the long-term outlook for the U.S. potato sector is positive — once the economy improves," says Assistant Vice President Marieke de Rijke of Rabobank's Food & Agribusiness and Advisory department.

China and India's demand for French Fries will rise when the economy recovers, he says, and and the United States has a strong position in frozen french fry exports

In the United States, consumption levels reached a peak about a decade ago. At that time, potatoes became known as calorie-loaded and some fad diets gave the potato a bad reputation, and levels of both fresh and processed potatoes started to decrease.

Consumer desire for healthier lifestyles and a desire for change meant consumers started to favor rice over potatoes as a source of carbohydrates.

"Since then, marketing activities have helped reverse the trend of decreasing potato consumption," says de Rijke. "However, further product innovation will be key for consumers to increasingly appreciate the potato again."

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