'As everyone already knows, we are dealing with a historically small harvest. As a result, potato prices will be pushed up in the near future," said Ferdi Buffen, director of potato trading house Weuthen on Thursday 30 August during his opening speech at the Kartoffeldag. Buffen also provided a forecast for the 2018 harvest.
The potato market at the end of August is different than it was a few months ago. A crisis situation has arisen due to the drought in Europe. Germany's largest potato trading company estimates yields in the country to be significantly lower (8,25 to 8,75 million tons). The expectation for the entire EU-5 is 20 million to 22 million tons.
According to Buffen, this means that, compared to recent years, on average 2 million tons less raw material is available in Germany and that 6 million to 7 million tons less will be available in the HAFPAL area (area in which French fries potatoes are supplied, between the North Sea and the imaginary border of Hamburg, Frankfurt, Paris and Le Havre).
Competition for resources
How does Weuthen deal with this? Buffing indicates that the harvest of 2017 can be found on this market for approximately 13,5 months. "It's almost unbelievable, but this and next week a few thousand tons of old potatoes will still be processed," says the director. "As a result, the 2018 season only lasts 11 months. However, potato prices will increase in the near future due to the enormous demand from the processing industry.
Until well into October, Buffen expects prices of €25 to €29 per 100 kilos of fries potatoes. According to Weuthen, the spot prices during the storage period are above €30 per 100 kilos the futures market notes today. He indicates that he sees €30 as the bottom of the market. Based on previous, more expensive years, Buffen expects prices to be higher in December to February than in May and June. However, given the historically high spot prices, significant quantities of export and food varieties will be processed during the harvest phase.
Want to store table potatoes?
The price of table potatoes will remain at a level of €24 to €28 per 100 kilos during the harvest, Buffen expects. Since many farmers will wonder whether storage is wise, Buffen notes that the costs and storage risk must be compensated fairly. He therefore expects prices of above €35 per 100 kilos for potatoes from storage.
Buffen also looked ahead to the coming season. The director expects that there will be a lot of demand for early potatoes for the 2019 harvest. "The 2018 harvest year will also have an impact on future contracts," says the director weuthen.
Few winners
He concludes with the conclusion that, despite the high prices for free potatoes, there are few winners on the potato market. This is because many potatoes are grown under contract. Buffen wants to include appropriate compensation in the contracts in the coming years.