On the 15th April, the Dutch government announced an allocation of €50 million to compensate potato growers and processors affected by the coronavirus outbreak. The closure of restaurants, cafes and hotels due to the coronavirus crisis led to a collapse in processed potato demand. As a result, the Mintec price of Dutch processed potatoes fell by 80% to €30/MT between the 2nd March and 17th July.
The government’s aid is expected to compensate processed potato growers, who have product in storage that can no longer be processed into French fries this season. However, the government policy has had a minimal impact on Dutch processing potato prices so far, with reports estimating the current storage of processed potatoes to be in the 2 million tonnes region.
The potato oversupply in the European market has encouraged growers to seek new markets and avoid wastage. Therefore, Dutch processing potatoes have been exported to Ukraine for the first time in history, because of the inability to sell the produce through traditional sales channels. This gave prices a marginal boost, with prices rising by €12.50/MT to €30/MT on the 17th July, from a low of €17.5/MT on the 27th April.
Government aid, coupled with access to new markets are expected to help a number of Dutch growers from going bankrupt in a low-price environment.