European chip exporters continue to benefit from solid demand for their products around the world. After the summer months were somewhat quieter, countries such as Belgium, the Netherlands and France are seeing their global sales grow.
Dutch potato processors were operating at full speed in October, according to previously announced results Numbers. The fact that this is also linked to excellent fries sales is clear thanks to data from the harmonized trading system. Overall, sales from the EU-28 fell by 10% in September compared to a year earlier, but if we look at the largest countries, there is a visible increase.
Rising margins
The average price per ton of frozen fries is still very good, especially when you compare the average amount of €1.265 with the price a year ago. If we look at the trend this year, a slight decrease is visible, although this is not yet noticeable in the EU-4. Now that factories can benefit from lower potato prices and other declining purchasing prices, margins can only increase significantly.
Remarkably, the United States is in second place on the list, with a volume of 20.000 tons of fries. Saudi Arabia remains steady at one. The country even bought a fifth more fries in September than in 2022. Sales to Brazil fell significantly, by almost 40%, but it still remains a major customer in Europe.
Competition
Now that the US itself has an excellent potato harvest this season, the question is when this will be reflected in the figures. Both in the home market and export. Countries in South America and Asia in particular can benefit from this and at these price levels the US is also very competitive with Europe.
Figures for the five largest European exporters are still a month behind. In August, a shortage of potatoes clearly played a role at the factories, although a clear recovery is visible compared to July. Compared to a year ago, 4% fewer fries were exported. The rolling total over a twelve-month period is still several percent above that of the previous period, with more than 6,1 million tons of fries.
Value almost 50% higher
As previously calculated, the value of exports is enormous increased. The above volume represents a value almost 50% above that of the previous year and that is an absolute record. Especially during the corona period, the price per ton of fries fell considerably, but this is no longer noticeable. Looking at prices within the EU-5, the peak is over. The average value fell several euros. In August, Belgium and Germany saw their volume decrease slightly, while that of the Netherlands remained stable and France still managed to achieve 9% growth.
The 2023/24 season will most likely not be so rosy on the sales side for factories. Not only because of the pressure from the US and Canada, but also because of the large buyers whose volume to be purchased is stabilizing or declining. The United Kingdom remains Europe's best customer, although volume has stabilized. A similar movement is visible in the Middle East. The market in South America is shrinking significantly and the US is also less active in the new season.
Future perspective
With an average price of €1.282 per tonne for chips in the EU-5, processors continue to do good business. This level cannot be maintained in the long term, but there is room for improvement. Especially with the decreased raw material prices and energy costs in mind. In the Netherlands, Belgium and France, the main question is how processors deal with a potential loss of 1,4 million tons potatoes. The challenge for the new season is to maintain the acreage. Growth is probably an ambition, but given major shortages in the starting material, it may not be easy.