The Belgapom quotation rose today (Friday 4 February) to €20 per 100 kilos for all varieties. An increase of almost 20%, or €3) in a week may be a giant step. It was striking that Belgapom calls the mood stable (supply equals demand). With an increase of €3 per 100 kilos, you would rather expect a 'fixed' mood.
According to Belgian traders and processors, this stable mood is due to relatively little trading. The transactions that take place are done at a significantly higher level. Another interpretation could be that there is simply not much trading, because there is little supply in the market. Growers are unwilling to make offers and are leaning back. In addition, a lot has already been removed and processed.
High processing rate
The pace of processing is high in Europe. The demand for chips is good, the cold stores are empty and the yields in the factories are low. There is little talk about it, but 10% of Fontane potatoes suffer from hollow. This has a negative effect on the efficiency of processing. The hollow Fontane has also ensured that growers took leave early so as not to run any risk in storage. The growers who still have their potatoes in storage now seem to have their boxes under control. With the daily rise in the price, they are not yet prepared to open the barn.
Belgians spinning yarn
The Dutch market seems to be lagging behind the Belgian market a bit for Fontane. Processors stay on their hands as long as possible so as not to be seen in their cards and thus make the market feel calm. Dutch industries also benefited from the extra supply due to quality (hollow) in Fontane in November and December, but that also seems to be drying up in the Netherlands.
Processors who have to pay a lot on the daily price (for potatoes), because they have contracted fewer tons per hectare (corona strategy), do not seem happy with the rapid and relatively early increase in the season. They try to keep the genie in the bottle in the Netherlands. Something that Belgian processors see as an opportunity again and are therefore active on the Dutch market through traders, who pay clearly more than some Dutch processors.
It is striking that the increase takes place so early in the season. Usually January and February are not the most spectacular months in terms of price increases. The fact that this is now happening seems to be a sign of the future. The 10% fewer potatoes available in the EU-4 due to the lower acreage and a moderate yield ensure an early demand market. Now that corona lockdowns have been lifted for the time being and the catering industry is open again all over the world, the demand for fries seems endless.{{dataviewSnapshot(2_1643971228)}}
French fries wanted
With a shortage of potatoes (and therefore chips) in America, the export market for European processors is wide open. If they can get containers, the sky is the limit for now. High prices for palm oil, packaging and transport do not seem to bother fast food chains and consumers. French fries must be eaten and Europe can benefit from that. The logical consequence is that payment has to be made for the limited amount of (free) potatoes.