The value of a share in starch company Avebe is rising above €400 each. Arable farmers are eagerly searching for an alternative and see Avebe as a safe haven once again.
It wasn't long ago that many starch potato growers paid €681 per share to return their shares to the cooperative. During the period when competition for hectares was fierce, other crops were more attractive to growers. Now that the tide has turned in other markets, Avebe is back in demand.
A total of approximately 10.000 shares have been surrendered in recent years. Avebe has decided not to reissue these shares. This means that arable farmers who want to resume growing starch potatoes must now purchase shares on the open market. Some farmers are quitting and deciding to sell their shares, but they are few in number. Therefore, the supply is limited.
However, demand for shares is increasing. Arable farmers who are receiving fewer contracts for French fry potatoes or flakes are looking for alternatives. Moreover, contract prices for flaked potatoes have also been significantly reduced. This makes Avebe shares attractive again. Another factor is that arable farmers need less space for sugar beets, as sugar beet cultivation is being reduced by 10% this year.
This situation is causing the value of Avebe shares to rise again. At the end of last year, the value was just above zero again. "That's good news. It's nice that a share has a positive value," observed Avebe CEO David Fousert in mid-December.
Since then, the value has increased considerably. Erik Brink of Schelhaas Real Estate Agency traded the last shares for €400 each. He's hesitant to say how much the price has risen since then. "I don't have any offers at the moment, so I can't deliver them."
According to Brink, the poor state of the consumer potato market is the main reason growers are once again looking for Avebe shares. "Avebe is seen as a safe haven. With Avebe, you know you won't hit the jackpot, but they do pay a fair, stable price."
Arend Otten, from the eponymous real estate agency in Hoogeveen, agrees. Farmers who are closing their farms are now entering the market with shares. This ensures that there are still some shares available. Otten mentions prices fluctuating from €300 to €500 per share.
A share gives the grower the right (and obligation) to supply 4 to 5 tons of starch annually to starch manufacturer Avebe. This means that approximately two shares are needed per hectare. Last year, starch potatoes were grown on just under 40.000 hectares in the Netherlands.