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EU processing potato price on the rise amid soaring production costs and tight supplies

February 1, 2022

1 mins read

The price of processing potatoes in the Netherlands rose by 21% in the three-weeks up to 26th January 2022, and up 260% year on year (y-o-y) to EUR 180/MT. Various market fundamentals are driving prices on the free-buy market, including soaring production costs and a seasonal decline in total potato storage stocks. In Q4 2021, there was growth in processing potato prices in response to a global surge in demand due to COVID-19 recovery, and a large resumption in global export trade. This is expected to remain as a bullish driver throughout Q1 2022 as lockdown restrictions appear to have eased globally and foodservice demand is recovering to pre-pandemic levels.

This follows a year of low production for the 2021 season in the EU-04 zone + UK (Netherlands, Belgium, France, Germany & the UK). According to World Potato Markets, production is forecast at 35.3 million tonnes, a decline of 4.1% y-o-y. Tight supply will continue to drive prices up until the 2022 planted area is known. This supply shortage is combined with a growth in input costs in 2021, including fertiliser, transportation and energy. As the season progresses following the end of harvest in October, storage costs rise and thus will continue to drive prices in Q1 2022. It is essential that potatoes are stored within a set temperature range (5-8°C), therefore this cannot be avoided. In addition, market participants are reporting a reluctance amongst producers to sell potatoes currently in storage, as the expectation is for prices to continue on an upward trajectory, which is adding to the bullish sentiment across the EU processing potato market.

Alice Witchalls
Alice Witchalls

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