If the markets start to move, or come to a price formation in an unnatural way, explainable developments cannot always take place. This is visible in the price of starch and flake potatoes versus potatoes suitable for chips.
An example of this is that for a while we see a quotation (Belgapom) for potatoes suitable for fries of €10 per 100 kilos, whereby a 'fixed rate' is used. The market price also remains unchanged in the Netherlands. That's how the first one came about PotatoNL listing this season, with pain and effort, at €10 to €12 for category 1 potatoes.
Industrial potatoes scarce
A striking situation in the market is the movement being made with starch and flake potatoes. The supply of potatoes intended for sales in this segment can be said to be scarce, to say the least. The market prices are now at the same level as those of French fries potatoes.
Last week was on the PAT list (Platform Potato Transactions) shows a transaction of €10 per 100 kilos (collected) for the Aveka variety. This starch potato variety from Avebe was purchased by a Dutch processor, with the flake line as its likely final destination. Chip manufacturers themselves also have flake lines at their disposal, which are in danger of coming to a standstill if there is little rejection of chip potatoes. There would also be scarcity at Avebe.
Once again, Avebe's suppliers, but also those of Emsland Stärke, are located in cultivation areas where yields per hectare are disappointing. Sales of the end product from the starch factories are good. However, the stock is very low due to the poor harvest of 2019. This is reinforced by the tight supply. This creates a new phenomenon, where starch and flake potatoes are paid almost as much as for chip potatoes.
Processors not on the market
As has been mentioned several times in previous reports, the extensive coverage of the chip processors is to blame for the market not rising. The continuous availability of raw material (the contract potatoes) ensures that there is no active search for potatoes in the market. Growers would like to continue harvesting during the harvest season and are therefore satisfied with the current daily price.
If the kilos per hectare are disappointing, settling for the price paid happens, in some cases with grumbling. If the harvest per hectare is good, those growers seem to be happy with it. The motto is: harvest potatoes and send cars.
Drought is playing tricks on growers
Yet it looks like there will be movement in the market at the end of last week (week 37) and at the beginning of this week (week 38). In contrast to the Netherlands, very little rainfall has fallen in recent weeks, especially in Belgium and the north of France. The weather forecast for the next 2 weeks also indicates little precipitation.
Growers in dry areas report that the soil is becoming too hard for harvesting; soil tare of more than 30% is no exception. During droughts, the soil becomes too dry to harvest, which undoubtedly affects daily prices. A similar situation was seen in 2016, when due to prolonged drought, harvesting had to take place well into November.
Below average harvest
The persistent drought in Belgium and Northern France will also affect the final harvest per hectare. Due to the lack of subsequent growth, this is considerably below the multi-year average.