The potato sector has had a difficult 2014/2015 season. Still, now at the end there seems to be an unexpected revival. What does this mean for next season? Kees van Arendonk (NAO) and Romain Cools (Belgapom) give their vision on the new season.
Kees van Arendonk on the Dutch situation:The new season is difficult to predict, according to Kees. “We are now halfway through June, and you can only predict with more certainty after a few months. Still, the signals are far from unfriendly. Remarkably, the free market is getting ever smaller. I don’t believe we’re going in the direction of the Americans. They only have contracts there, and fortunately that’s not the case for us yet. With us, there will always be a percentage of free potatoes. 100% contracting is not feasible either. With a failed harvest, you’d have a shortage, and with a large harvest, you’d have volumes left over. I wouldn’t be surprised, by the way, if the free market would decrease further.” He notes that the mood is ‘cautiously’ optimistic at the moment. “We’re not celebrating just yet, but I spoke to many companies, and they are also pleased about the consumption of fresh potatoes. From several directions, I hear that sales have gotten another boost. The responses to the ‘Power to the Pieper’ promotion have also been positive. Of course we will continue with that!”
Romain Cools on the Belgian situation:Romain: “Last year we had a fantastic growing season. This year it’s another matter due to a cold, dry spring. Of course it all hasn’t started yet, but the way things are looking now on the fields, the potatoes are in good shape. The acreage for early domestic potatoes has decreased, so at the moment – during the overlap from old to new season – demand is good and prices are fine.”
When it comes to new potatoes, things will be tense, Romain thinks. “We will be later this year, but lack of rain in particular is causing quite a bit of unrest, which we’re also seeing in the prices of the futures markets. Regarding the 2015/2016 storage season, I see that the acreage in Belgium and surrounding countries has only gone down slightly. This shows that the sector is aware that last year, there was exponential growth, and the chance of this situation repeating is small. When we look at the data currently available, we find that it could be a year with slightly more normal prices. Of course a part is still uncertain, but this also has to do with the fact that the free market has decreased. With increased demand, everyone is going for that limited market, and prices increase spectacularly, but with ample production the reverse happens. This is a reality that has to be taken into account more by the sector in future. New equilibria have to be found, but outside of the normal market forces.”
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Kees van Arendonk