Despite a shortage in the potato market, prices in the Netherlands and Belgium were under pressure at the beginning of the month. Currently, the market appears to be recovering. However, the lack of free potatoes and the lack of a 'real' market give the growers little to hold on to.
Belgian stock figures (from Flanders and Wallonia) show the situation on reference date April 1. At that time, according to PCA and Fiwap, 1,25 million tons of French fries potatoes were still in Belgian warehouses. This level is slightly higher than on April 1, 2017. However, the 2016 harvest included an area of 93.000 hectares, compared to 97.000 in 2018.
Open Stocks
Of the 1,25 million tons of potatoes in stock, the vast majority (670.000 tons) are of the Fontane variety. The other potatoes are of the Bintje variety (130.000 tons) or other varieties (450.000 tons). Only 16% of all tonnes are still freely marketable (approximately 200.000 tonnes). However, of the large volume of Fontane, only 50.000 tons can be freely sold. The Bintje volume has the largest percentage free at 40%. Of the other varieties, 10% are still for sale.
Considering the previous harvest years, a volume of 130.000 tons of potatoes of the Bintje variety is very little. For comparison: about 2017 tons of Bintje from the 450.000 harvest were in storage on the same reference date. After the 2014 harvest, this was even 780.000 tons. A free-sell stock of 40% on April 1 is normal.
Strategy of processors
These multi-year figures also show the strategy of processors. Many freely purchased potatoes were processed early in the season, from all over Europe. The 'long-life' contract potatoes of good quality are saved until last, so that they do not have to compete on the expensive free market.
A lack of free transactions also caused the market price in Belgium to increase by €4 per 100 kilos went down. The PotatoNL listing did not agree with this. There is certainly (a lot of) demand for potatoes, especially from exports. Category 2 therefore increased by €1,25. The DCA PAT Index shows also a downward trend. In March the market was still quite erratic. Between early and mid-April the PAT price fell by €0,90 per 100 kilos.
Higher free retail prices
Those who still have potatoes to sell freely can currently achieve a significantly higher price in other segments (such as export and fresh market) outside the French fries market. This also applies to potatoes that are primarily intended for processing.
In the south-west of the Netherlands, for example, €30 is paid for free Fontane without many problems, insiders report. Such a price contrasts somewhat sharply with the current futures market quotation for the old harvest or the current DCA PAT Index of €29,20.