In recent weeks, the price of free buy potatoes in Northwestern Europe has seen a significant decline, raising concerns among growers about the sustainability of their operations.
In a press release issued today, the Northwest European Potato Growers (NEPG) has voiced its apprehension over the plummeting prices which, they claim, no longer cover the costs of production.
While there’s a natural correlation between supply and demand, the NEPG points out that the current slump in free buy potato demand can be attributed to an increase in contracted volumes and a surge in the supply of non-storable potatoes. This has led to a situation where actual free buy volumes are at an all-time low, resulting in indicative quotations in an already constricted market.
Growers are being advised to exercise caution when considering these quotations. The NEPG emphasizes the importance of not giving in to market panic, especially since the underlying market fundamentals remain strong in the long run. They further highlight the significance of storage in maintaining a stable supply.
Looking ahead, the European processing industry is projected to require an additional 2 million tons of potatoes in the coming months, a notable increase from two years ago. This suggests promising price prospects for the future. However, the current low prices pose a challenge for growers, who seek assurance for their future plantings, especially given the increasing challenges they face.
From economic and legislative hurdles to technical issues and the looming threat of climate change, potato cultivation is becoming a high-risk venture.
The NEPG calls on all stakeholders in the European potato industry to consider these factors. If the industry aims to sustain its supply momentum for the upcoming campaign, it’s crucial to address these concerns and ensure a conducive environment for growers.