Processors raise ceiling 5 euros higher than in 2016

It is striking that all Dutch potato processors are unanimous about this. The processors report that raw material prices above €30 are not possible, because the French fries sales then stagnate. On the other hand, foreign processors seem to be able (or willing to) pay a little more and therefore buy a lot abroad. However, the coverage of the Dutch industry seems greater than that of the Belgian and German industry, making them more comfortable in their seats.

The year 2016 stands out
Compared to other years, 2016 stands out. In the 2016/2017 season, there was also a potato shortage, mainly due to extreme weather and flooding in the south (east) of the Netherlands. The ex-land period was a turbulent time in 2016, with prices up to €25 (ex-country) being paid. All this to make up for the shortfalls.

This season, too, the factories have tried to make up for the potato shortages during the ex-country period; after all, it is the time when most potatoes are available. This was easier in the Netherlands, because the overflow areas could be used.

In 2016, the potato market came to a standstill after Christmas. Processors were in fact not prepared to pay more than €25 for the raw material, with similar arguments regarding the French fries sales. In 2016, even a single processor closed for a period, which was due to a (too) high raw material price.

As a result, a kind of plug arose in the physical market at the end of March 2016. This is because growers had waited until the Dutch industries were prepared to pay more. However, that ultimately did not happen, which resulted in additional offers in April. Later it turned out that there was indeed a hole in the position of the processors, but this only came to light at the end of the season. Many growers were therefore no longer able to benefit from this.

Same strategy
Whether this strategy will also be implemented in 2018 remains to be seen. However, it is clear to see that the market makes an almost equal movement from week 42 to week 8, with exactly €5 price difference (physical €25 in 2016 and €30 in 2018).

However, the 2018 inventory and revenue figures could show a different scenario (due to the shortages). Although this will have to be due to the foreign demand for potatoes. If the Dutch processors adopt the same strategy as in 2016, €30 until April appears to be the top end.