As coronavirus lockdowns stifle demand for processed potato products across the globe, prices in Europe continue to stagnate at lows seen since the pandemic started. Earlier in the week the Mintec Benchmark Prices for processing potatoes out of Belgium and the Netherlands were reported at €19/t and €20/t respectively, a decline of over 80% since the start of the year.
Actual trade on the free market remains light at best as processors work their way through a mix of contracted stocks and old crop material. Sales of finished products through foodservice channels are recovering as countries emerge from lockdowns, but anecdotally these are reported to still be lower than normal. We have entered this season with freezers full of processed products and limited demand to move them. The longer this continues the harder it will be to shift stocks of raw material later in the season.
For table potatoes, which benefited from increased demand during the lockdown, there are some indications that demand for freebuy supplies may be lower throughout the season. Overall the area of table potatoes is likely to have slightly increased in several countries in Europe. However, the spike in demand seen under lockdown is easing as people reemerge into public. This means that despite overall demand likely remaining slightly above the same period last year ago we will not see the same requirement for table potatoes as we have the past few months.
In the UK, prices for new crop packing material fell rapidly over the week with the Mintec Benchmark Prices for English grade 1 whites quoted at £120/t, down £70/t from two weeks prior. Industry sources quoted a lack of freebuy demand from retailers, which in my opinion is likely caused by another year of the contracted area increasing, leading to lower freebuy requirements.
So much of this season will be determine by the extent that demand recovers or is impacted by a second wave of coronavirus. In the meantime, what we are hearing from industry is that in the short term prices are likely to stay subdued with limited opportunity for upward movement. At the moment the everyone is still working through the early crop with any supplies surplus to contract being met with next to no demand. Any upward pressure on prices would likely be on the supply side caused either by the hot weather forecast over the next few weeks limiting yield potential or difficulties during lifting.