Mercosur can give a small boost to fry exports

The free trade agreement Mercosur has a strongly negative connotation in the European agricultural sector. The European Commission emphasizes the benefits for the export position of the member states. Among other things, the export of fries and other potato products may benefit from it. However, the question remains how significant that positive impact actually is. South America is estimated to account for an annual turnover of 900,000 tons of fries, making it an important customer for Europe regarding the export of potato products. In 2025, the total export volume increased by 7% compared to the previous year, and the Netherlands has benefited significantly from this. The four Mercosur countries (Argentina, Brazil, Uruguay, and Paraguay) together consumed 43% more fries. Belgium performed considerably worse. The country exported nearly a fifth less fries to the four destinations. Fries exportThe last month of 2025 has been favourable for EU-4 exporters of frozen fries, with the highest export levels reached in five years’ time. The four Mercosur-countries imported 17,345 tonnes during December, compared to 10,687 tonnes in December 2024. The previous year saw particularly strong sales at the start of the year, after which the import level strongly reduced. 2025 was a year of ups and downs.The total export level for frozen French fries to the four Mercosur countries reached 194,378 tonnes during calendar year 2025. This is a 7% or 12,728 tonne increase compared to 2024. Belgium saw the largest drop, with 19.5% less fries sold. A reduction of over 21,000 tonnes. It still remains the biggest supplier of fries, outside of the South American countries, with 87,812 tonnes. The Netherlands follows with almost 59,000 tonnes. That is a 43% increase compared to last year (17,758 tonnes). Egypt comes in third with a 44% increase at 40,000 tonnes. China more than doubled its exports, although it remains relatively small with 2,031 tonnes. The US is also back, with 1,378 tonnes, but that is a 600% increase compared to 2024. Tariffs and chargesCurrently, exporters from the EU face import duties of 12% to 12.5% in these four countries. Under the Mercosur agreement, this is expected to be reduced according to current plans. After a maximum of ten years, it will be halved, and after fifteen years, the tariff will be 0%. It will therefore take several years before the fry sector can truly benefit. Where the agreement may work positively earlier is in having an open market towards the two continents. South America has a history of anti-dumping duties on European fries. For instance, Colombia initiated one that was later declared null and void by the WTO. Brazil also has an anti-dumping duty in place until the end of this year. The Netherlands is hit hardest by this with a 41.4% charge. For Germany, it is 37%, Belgium 24.8%, and France 18%. DelayThese duties were established in 2017 and extended in 2023 for a period of four years. It is uncertain whether Brazil will seek another extension when the Mercosur agreement takes effect. That is still not guaranteed. By the end of January, it seemed that after two decades, a definitive agreement in the EU was finally in reach. Von der Leyen ultimately stumbled over the European Court. The high judges must first express their opinion on the deal. This process is expected to take a year or two. Meanwhile, the South American potato processing industry is developing rapidly. Lamb Weston opened a brand new factory in Mar de Plata in Buenos Aires in October 2025. Competitor McCain is working hard on a factory in Azará in Brazil, which is expected to be operational by mid-2027. Simplot already has a factory in Mendoza in Argentina but announced an expansion of production in December. And it is not just the foreign giants that have set their sights on these countries. National player Bem Brasil, one of the largest processors in the country, processed 10% more last year than in 2024. With its 210 million inhabitants, Brazil is the fry country of South America. In comparison, Argentina has a population of 46 to 47 million. In 2024, Argentina exported no less than 145,000 tons of fries to its neighboring country (and 40,000 tons to Paraguay). From Belgium, 96,000 tons came, and the Netherlands delivered 42,000 tons. Growing sectorSouth America was heavily reliant on fry imports from Europe a decade or more ago. However, the continent is increasingly self-sufficient now. Investments in new and existing production facilities are driving this. In 2023, the total potato acreage was as much as 932,500 hectares, yielding 17.39 million tons. The EU's export position is further under pressure. Additionally, there are more players entering the market. Egypt is a relatively large player, and China has also found its way to the continent. Finally, the US exported some volume to the four Mercosur countries for the first time again in 2025. Whether countries like Argentina and Brazil can also start exporting globally in the long term remains to be seen. There is much demand on the continent itself, and competition is fierce. However, questions can be raised about the positive impact of Mercosur. The benefits are relatively small, especially considering the time frame. By that time, the market will likely have evolved significantly.