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NEPG: Potato harvest adjusted to 24.5 million tonnes this year

This week, the official NEPG harvest prognosis has been adjusted downwards for the five NEPG countries. Total harvest is estimated to be 24,551,000 tonnes this year. That is three per cent lower than last year, and 3.6 per cent lower than the five-yearly average. The amounts are gross figures. The most important reasons for the mediocre harvests are the wet and cold weather circumstances during spring, and the hot, dry summer. Especially new strains for processing have lower yields this year.

More tare expected 
In general, quality is good, but the NEPG expects more losses this year anyway. Cultivators have to thoroughly go through the conditions with their buyers before delivering contracted potatoes. All available potatoes are processed, whether they are imported from Poland, oversized seed potatoes, double destination strains or damaged/misshapen potatoes for processing. Cultivators notice that tare percentages can vary from one processor to another. Now that processing capacity has been extended significantly, as a result of increased export outside of the EU, the NEPG expects some friction between demand and supply. The current higher price and the term market for April 2017 confirm this.

Next season
The NEPG has indications that contract prices will increase next year as a consequence of the ‘hunger’ for materials from the processing industry. The first signed contracts for the German processing industry are expected soon. Compared to the previous season, higher prices are expected. The NEPG also questions the availability of sufficient seed potatoes for chips strains. The seed potato price for Bintje will be higher next year. Although demand for chips strains increases, the NEPG is under the impression that the area will remain balanced regarding demand next season.


Source: NEPG

Added points of interest from VTA:
  • The largest ‘hunger’ for potatoes is in Belgium. There are fewer potatoes under contract, so more have to be bought. As of the 10th of November, Belgium had 190,000 tonnes of potatoes less in storage compared to the previous season. The storage stock-taking among VTA members shows that, in absolute tonnes, there is an increase of six per cent in storage compared with last year. Belgium currently dictates the market. The largest expansion of production is occurring here as well. However, it is sometimes wondered whether the ever-increasing material prices will allow for sufficient final product sales. Because export outside of the EU gradually increases yearly, Western European processors can (continue to) compete on this market;
  • In order to fill the shortages, processors have processed many ‘double destination’ potatoes from the starch field this season. This is still happening, though less often, in some factories. Besides, potatoes have been imported from Poland and the UK. Furthermore, problem batches have been processed as a priority, and contract potatoes have been pushed down the line. Additionally, industry has also regularly bought extra potatoes in order to maintain their potato position somewhat. Even potatoes that were not the best quality have been processed. In Belgium, batches with high tare percentages were shortened by a maximum of ten per cent. The underwater weight, however, is quite high, meaning returns for processing are higher;
  • One thing to consider is that cultivators, both domestic and international, are keeping the barns closed for now. This could lead to additional supply during the course of next year.
All in all, it is a good start to the harvest of 2016/17, with good prospects for the new year. A similar sales strategy, however, remains of the utmost importance. For that, the VTA-PISA list is a good representation of the daily trend in prices. 

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