Potato prices tumble, under weight of supply glut

Ideas of a glut are provoking a slump in potato prices in Europe, with benign weather improving hopes for output already raised by increased sowings potentially in Belgium to the highest since the 1980s.

Prices of processing potatoes in the Netherlands have fallen to E40-56 a tonne, down from E90-109 a tonne two months ago and from values approaching E300 a tonne a year ago, according to the UK's Potato Council.

Prices of Belgium's noted bintje potatoes, the secret behind what the country considers its superior "French" fries, have fallen to E30 a tonne, from E70 a tonne two months ago.

In the UK, the price of potatoes on the open market has fallen below £110 a tonne, down more than 70% year on year.

Larger sowings

The declines reflect prospects for strong harvests in the major north western potato producing countries, after strong output too in the Mediterranean countries which export into the core EU, as last year's strong prices prompted strong sowings.

In north western Europe, "industry sources to date point towards growth in the area of potatoes grown during the 2014-15 season", the Potato Council said.

French sowing are seen up 3.6% at 121,410 hectares, while those in the Germany are seen up 2.3% at a three-year high of 248,300 hectares.

In Belgium, sowings may have reached 81,165 hectares, "possibly the largest planted area in 30 years", the council said, although UK plantings have bucked the trend, dropping 2.1% to 119,900 hectares.

Many UK potato farmers dropped out after the horror year of 2012, the second wettest on record, which forced growers to leave much of their crop in the field and, for some tied into contracts, saw no compensation from the price spike which ensued.

'Take old potatoes for free'

Meanwhile, "crop development so far has largely been reported as ahead of schedule", the council said, adding that "weather conditions of late across many of the key north western European potato growing areas have been conducive to growth".

The European Commission's Mars crop monitoring division estimates the EU potato yield hitting 32.0 tonnes per hectare this year, 4.2% above the five-year average, after a "promising start".

And this when stocks left over from last year are elevated too, with Belgium, Britain, France and the Netherlands all seen possessing larger inventories, as a percentage of output, than a year ago.

"There is no sign of when the price decline might end," Michel Binst at importer Primimport said.

"There are good supplies everywhere."

With stocks of last year's crop still high, he flagged talk that in France "you can just take old potatoes for free.

"Barns and cold stores need to be emptied," ahead of the next harvest.

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