Potato crop update
At the end of last year, we had just started processing potatoes out of farmer's storages. To refresh your memory, during crop season 2012-2013 the price of potatoes rose due to crop failure in the UK and Belgium. The resulting demand for fresh potatoes dominated the market and as a result drove up prices.
A turn for the better
After this expensive season, we faced the late development of
the 2013 early crop, which unfortunately resulted in continued high
prices, after the switch from the old 2012 to the new 2013 crop in
July. The 2013 crop figures represented only about 1 million tons
more than in 2012, which failed to ease the pressure on demand.
Whilst the news from Eastern Europe and Russia about crop failure
caused high price expectations during the early months of the
season and it was expected therefore that they would show up as
buyers for fresh potatoes, again driving up the European potato
Today we already have 7 months of the 2013 crop season behind us and another 5 months to go before the switch to the 2014 crop. Things have however turned out far better than predicted as the expected export demand did not materialise (with Russian and Turkish borders closed). The mild winter and moderate temperatures (without frost or snow) meant that the consumption of typical winter dishes based on potatoes, such as kale and pickled cabbage fell. In addition, it would seem that the higher potato prices have led to a general drop in consumption of fresh potatoes.
Therefore, the good news is, that for the moment, processors
seem to have enough potato coverage in their contracts and do not
need to go to the market for additional volumes. Plus, the quality
of the 2013 crop is good, offering good yields in processing.
Whilst over the last few months' Belgian and French crop yields
have been adjusted upwards from earlier published yield estimates.
All of these factors have resulted in a quiet potato market with
only limited demand easing the pressure on price.
If things continue as they are we are confident that the quality and the available volumes will meet the demand of the potato processing industry until the end of this season, although we cannot rule out unforeseen changes which may affect the market, as it is sensitive to even the smallest changes.
As a note of caution, we must appreciate that currently the available potato volumes are limited and looking to the future, an eventual (however unexpected) opening of the Russian and/or Turkish border for Western Europe could lead to a rise in consumption and result in a sudden change in the market. If this does not occur however, the early planting of the 'early crop' potatoes should determine market developments and for now we do not foresee any market changes before the end of March. As always Aviko are dedicated to delivering quality from field to fork and by understanding the crops and market we ensure that we minimise risks in order to deliver consistently excellent potato products to our customers. We will of course keep a close eye on any possible developments which will affect the potato market and keep you regularly updated via our website.