Dutch processing potato prices jump from €2 to €15 per 100 kg amid drought
The upper price for freely traded processing potatoes in the Netherlands rose from €2 to €15 per 100 kg in one week as drought and heat weakened crop prospects. The main harvest from late August will determine whether the increase affects European processors and retail prices for fries and frozen products.
Spot market reverses after months of oversupply
The upper price for freely traded processing potatoes in the Netherlands rose from €2 to €15 per 100 kg within a week as drought and high temperatures changed market expectations. PotatoNL on Monday set a range of €2-€15 per 100 kg for potatoes used by major French-fry manufacturers, compared with a maximum of €2 a week earlier. The wide range reflects differences in variety, quality, storage condition and intended use.
Potatoes intended for fresh fries traded at up to €18 per 100 kg, against a previous weekly maximum of €5, according to Dutch agricultural magazine Boerderij. The increase marks a sharp reversal from the spring, when stocks left by the previous year's large harvest exceeded processors' requirements. In March, some Dutch farmers had to pay to dispose of rejected potatoes as animal feed. In Belgium, the April quotation for the important Fontane processing variety temporarily fell to €0.
Belgian and German demand strengthens
Belgian processors and traders are now seeking additional supplies in the Netherlands, according to Dutch growers' association VTA. Demand is also improving in Germany. Agrarmarkt NRW reported positive momentum in the industrial potato market, while German producer group Reka raised its quotations substantially. Uncontracted processing potatoes were most recently quoted at €5-€8 per 100 kg, depending on size and variety.
The market shift is being driven primarily by weak crop development in several major European production areas. Agricultural trader Wilhelm Weuthen said in its 17 July market report that trial harvests of early varieties had been disappointing. Unirrigated fields in France, Belgium, the Netherlands and Germany were suffering from heat and insufficient water. Some processors therefore plan to use potatoes from the old crop for longer than expected, adding demand for storage-quality supplies.
Main harvest will determine supply pressure
The Netherlands' national average precipitation deficit recently reached 221 millimetres, according to calculations by weather service KNMI. Its 15-day forecast indicated that the deficit could rise to around 245 millimetres, putting the season on a drier path than the average of the 5% driest years. Conditions were particularly dry along the west coast, in Zeeland and in parts of Limburg, while many western and southern areas received only a few millimetres of rain between 1 and 20 July.
Ferdi Buffen, managing director of agricultural trader Wilhelm Weuthen, cautioned against drawing firm conclusions before the main harvest begins in late August. Drought is expected to reduce yields on unirrigated land, but old-crop supplies remain adequate and crop development during August could still affect final availability. The spot-market increase also has a limited direct effect on consumers because much of the crop is supplied through longer-term contracts. At €15 per 100 kg, the raw potato cost is €0.15 per kg, and even full pass-through would add only a few cents to the potato component of a portion of fries. Cooking oil, energy, labour, transport and rent remain significant costs. A persistently dry period and weak main harvest, however, could put broader pressure on European manufacturers of fries and frozen potato products.
