Europe, UK, Ireland, Trends

War in Ukraine, sky-high production costs make for uncertain times in the European potato industry

Following the Russian invasion in Ukraine, potato markets have been somewhat hesitant during the last weeks, according to the North-Western European Potato Growers (NEPG) association.

The industry body says in a news release that there should be no reason for much change in free buy prices or sales of processed potato products in the European Union and abroad. Processing activity in the NEPG zone is good and running at optimum levels and processors need raw product.

Nevertheless, there is a certain degree of uncertainty regarding frying oil availability and cost (for the coming weeks and months, and even for next year), as well as logistical difficulties – drivers and trucks, containers and shipping – and related higher costs.

Sky high production costs and very good cereal and maize prices could influence potato plantings

At the beginning of this year, production cost for the oncoming season was expected to grow by 15 to 20%. Gas, petrol and electricity have seen tremendous price hikes since the Russian invasion of Ukraine began. The same is true for fertilizer, mainly for nitrogen and potash. And these increases multiplied several-fold and will inevitably have consequences on all the prices of raw material and products entering the potato value chain.

Some areas originally earmarked for potatoes will most likely be planted with spring cereals, maize and/or sunflower. Some potato growers have agreed contacts with processors with whom they have (or were planning to sign) contracts, asking for higher prices or more flexible conditions.

Most everyone in the potato chain face higher production costs. To make sure that growers get a fair price, traders and processors should be able to sell packed or processed potatoes at higher price to retailers. And consumers will have to pay more too.

Finally, climate change (a dry and hot spring and summer for example) could make things still more complicated…

Looking towards the future

Growers must realize that in spite of this very important crisis, European countries (and others worldwide) will continue to need potatoes and potato products in the future.

Contract conditions (a contract signed means a contract to be respected) and uncertainties in production costs have to be carefully taken into account prior to any decisions regarding importance of individual potato acreage and this season’s plantings.

Difficulties related to growing potatoes (land availability and renting prices, consequences of new national and/or CAP regulations on subletting) could also have an influence on potato plantings this season and in 2023.

Source: North-Western European Potato Growers (NEPG). Original release here

The following organisations are active members of the NEPG (in alphabetical order): ABS (B), FIWAP (producer section) (B), FWA (B), PCA (B), REKA (D), UNPT (F) and VTA (NL).

Editor & Publisher: Lukie Pieterse

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