Inside: Potato Market
Can industry handle 4 million tons of pagers?
Potato harvest 2017 is the first season in which the limit of 4 million tons of ware potatoes is exceeded. In recent years, only 2011 and 2014 came close with 3,857 and 3,871 million tons respectively
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Choose the subscription that suits youDutch consumer growers produced a lot of potatoes in 2017 (4,012 million tons). This CBS estimate stands out above other estimates. For example, in its mid-September forecast, the NEPG assumed a yield of 27,9 million tonnes in the EU-5.
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CBS's 4 million tons is about 140.000 to 155.000 tons higher than the record years 2011 and 2014. Since then, processing capacity has increased considerably, but is that enough to process all the potatoes?
Industry raw material needs
The Dutch potato processing industry processed approximately 2011 million tons of potatoes in 3,473. In 2014 this was 3,693 million tons. In the following years, processing continued to grow as capacity increased. Last year the industry already had a raw material requirement of 3,887 million tons. The chip industry would need every potato, it was said.
Price pressure is increasing
The high harvest estimate is not good news for the market. Prices have been at an extremely low level since the end of August. Delivered potatoes are charged at a price of less than €4.
This situation will not end for the time being with this new information. In addition, there is pressure from the seed potato trade. Trading houses are now starting to deliver. The seed potatoes have grown quite large this year. Large tubers have to go and that puts pressure on the export market.
How did things turn out in 2011 and 2014?
If we look at how the market developed in 2011 and 2014, we also see a long-term low price level between €2 and €4 per 100 kilos, only at the end of the storage season (mid-June 2015 with regard to the 2014 harvest year). ) to rise slightly to €7 and at the latest €13.
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Potato futures market is slumping
On Tuesday, October 31, the April 2018 contract on the potato futures market dropped. At 14:30 PM it recorded a reading of €5,40 per 100 kilos, a decrease of €0,40 cents.
In short: things look mediocre for the time being and the assumption that the increased processing capacity will create a price floor in the market cannot be supported, because there is virtually no market.