The 2023/24 potato season started so promisingly. It may not have seemed to last in terms of yields, but the prices more than made up for that. The reality that has emerged in the potato market in recent weeks will hit home hard in the coming weeks.
The pink cloud of less than six weeks ago, when market prices around the €40 level were almost perceived as normal, has now turned into a gray cloud. The low point for the time being is the Belgapom quotation on Friday, September 22, with potatoes suitable for early fries and now Fontane for the first time this season at €10 per 100 kilos. The vote was logically described as lame.
The fact that a potato market can turn around so quickly is not a new situation and is certainly known to the insider who has been around for some time. But until recently, this was absolutely not taken into account by many in the sector, certainly not to the extreme extent to which it is now the case.
Not everything is fixed
Until recently, growers with delivery contracts looked at the market with a grumpy look. It wouldn't be the case that the potato market would move between the €30 and €45 level, would it? Today, the prospects for the coming months are completely different and the supply contracts will ensure a good financial basis for one hectare of potatoes. In that sense, the truth regarding market pricing does not really dawn on the growers.
The fact is that ultimately part of the balance per hectare is determined by what the free market does. Or via co-delivery kilos or via the portion of freely traded potatoes. The grower who participates in a potato pool may also face disappointment. Apart from the harvest risk component, which may still create some tension, previous seasons show that little positive can be expected in terms of price formation for the time being. During the storage season, in years with a price-wise false start (such as this season), it is difficult to show a recovery before the turn of the year.
In all respects, the 2023/24 season could go down as a key year, if the potato market follows the enormously explosive growth in worldwide French fries sales and the associated fries price. And do chip processors further bind growers to ensure they have access to sufficient raw materials at an early stage? Or will the market fall back into the old pattern that still exists, whereby if too many potatoes appear to have been grown in the EU-4 countries, there is no market and prices for second types and starch come into the picture.
Basically, there is a desire for some control so that all parties in the chain can be satisfied. After all, sufficient money is earned from the sale of the end product. Difficult dilemma, because due to the further erosion of the market mechanism in recent years, price fluctuations will become more extreme (the past few months are proof of this), making it increasingly challenging (in a financial sense) to get through a season. 'Someone' somewhere will have to pay the bill (read: risk).