Where can I buy French fries potatoes? That is the question that mainly concerns the Belgian processors. In recent years, the Belgians have been stacking record upon record when it comes to French fries processing and a new processing record will also be set in 2022. Of course, potatoes are needed to make the end product, and that is just a problem with regard to the 2022 harvest.
As is now known, the potato harvest in Belgium, but certainly also in the chip potato growing areas of Northern France, has been quite disappointing. This, in combination with the hunger for raw materials due to further increasing demand for end products, could give the market a more explosive character.
There is no question of an explosive character of the market. Although market prices have picked up again in recent weeks after the initial storage period, the price trend can be described as gradual. The futures market for the April 2022 contract was still trading at €24 at the beginning of December, but was able to make a step up when the various potato quotations turned out higher. In Belgium, the initiative was withdrawn before Christmas due to a higher Belgapom quotation (from €22,50 to €25 for Fontane). The other countries have now followed suit with regard to the various quotations.
Shock effect
The question is, with a large part of the storage season still ahead: what next? In that sense, the futures market, with a quotation at almost €29, clearly shows the sentiment for the coming weeks. With further expected demand for potatoes, it is logical to assume that prices in Belgium, followed by the other EU-4 countries, will rise to €27,50 in the short term. But €30 is also within expectations. In principle, a market price, especially for varieties such as Agria, Markies and Innovator, can rise above the €30 level without any problems. However, things will probably proceed gradually as earlier in the season.
Explosiveness and the potato market no longer really go together. Paying more for potatoes does not give you more volume in the current structure of the market. A shock effect, as you regularly see in the onion market, almost no longer occurs in the potato market, unless it is a persistent European drought (2018 harvest) or too much rainfall on a large scale (2016 harvest). An important reason is that many potatoes already have a 'owner' and only have to be paid for on the basis of the current market price. The conclusion is that the formation of the potato market price has become increasingly predictable in recent years, especially from the end of July of the growing season, even though it is known that the relationship between 'need for raw material and sales of fries' is significantly out of balance, especially in Belgium and France. .