The cultivation of starch potatoes has increased significantly in recent years. Together with better growing conditions, this is causing considerable price pressure on the starch market. The demand for starch products is good due to the corona crisis, but there are challenges in particular logistics. These ingredients all have consequences for Avebe's campaign price.
Avebe's campaign price for the 2020 harvest is €72,50 per tonne. For member growers, this means that €7,50 per tonne will be paid out on top of the advance payment for the A volume. The potato growers receive this at the start of the season, based on a starch percentage of 19%. If you include the compensation for starch content, quality, delivery time and full delivery premium, the payment price amounts to an average of €83 per tonne, the company says.
Lower price, more money
Last year, Avebe paid €76,50 per ton as campaign price and €84 as payment price. Despite the decreased price per ton, the cooperative is paying out more than €25 million in extra potato money for the past campaign, compared to the previous season, the growers have been informed. The financial year will close at the end of July. This is followed by the cooperative result, part of which is paid out to the members as a performance prize.
Liver problems
At the start of the corona pandemic, the starch producer was able to benefit from increased market demand. Many products that contain potato starch (such as pizza bases) increased in sales. This is in contrast to the chip market. Still, the 2020-21 season was not easy for the company. To start with, due to increased uncertainty and logistical problems. The order book is full, but getting products to the customer on time is difficult. For example, because fewer sea containers are available. In addition, Avebe is experiencing supply problems with auxiliary materials and packaging materials, it said.
Another factor is the increased starch production in Europe. The area in Denmark and Poland, among others, increased significantly last year. In addition, the harvest was also better compared to the dramatic 2018 and 2019. The market for basic products such as native starch (unprocessed starch) and protein for animal feed therefore traded at a much lower level than was the case last year.
Solanic improves price
All the more reason for Avebe to focus on innovative starch and protein products, with the Solanic protein as the main supplier. The company sees continued interest in this from both existing and new customers. To improve the margin, strict cost control is being pursued, it reports. As a result, the impact of the low basic prices on the payment price has ultimately been largely compensated.
The above prices refer to the A volume. €45 and €15 per tonne are paid out for the B and C volumes. The performance components are paid out over all 3 volumes. Of the A volume, 98% was fully delivered last season. This results in a premium of €3 per tonne. Due to the weather conditions, some growers have again had to deal with low yields. The balance arrangement then comes into effect. This means that the B and C volumes of the unused A volume will be charged at the A price. In practice, this means that just under half of all B potatoes were paid for at the highest price.
Pass on costs
The past campaign went smoothly and according to plan. The factory in Gasselternijveen operated a little longer than expected, until mid-May. This is also the intention for next year, with the campaign starting in mid-August. A longer campaign allows Avebe to take better advantage of market conditions. Avebe passes on the increased costs for, among other things, transport, energy and packaging materials. It also tries to pass on the increasing costs for growers in the sales prices. Most of the potatoes have already been planted and most of the crops have already grown. A late spring does not mean a delayed start of processing.