The Mintec Benchmark Prices for processing potatoes from the Netherlands rose by 7.0% month-on-month (m-o-m) to EUR 246/MT on 6 September, an increase of 82.2% year-on-year (y-o-y). The recent rise in prices came on the back of drought concerns with warmer than average temperatures and a lack of rainfall across the EU leading to a downward revision in yields in August. Additionally, growers have seen significant rise in production costs, including fertiliser, sprays and energy, which is likely to be passed along the value chain onto consumers.
According to market sources, some producers have delayed desiccation and harvest to allow for additional time for crops to bulk. However, harvest is now in full swing and yields are highly variable at this point.
On the demand side, the rise in the cost of living and fears of a recession could boost potato demand. The UK’s Consumer Price Index (CPI) climbed 10.1% y-o-y in July driven largely by the significant growth in energy costs. This figure is expected to climb over the winter months and consumer budgets are set to tighten as energy spending increases as households turn on their heating.
As budgets tighten, consumers are expected to opt for products having good value for money with long shelf life, including both raw potatoes and processed potato products. With the potential for lower yields across the continent, any shift in demand over the coming months will be a key watchpoint for prices in the 2022/23 season.