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AMA Market Report July 2020:

Austrian potato market in distress - free goods almost unsaleable

After the past few years, which were very difficult for local apple farmers and marketers, the current season is coming to a rather forgiving end. From the very start of the campaign, the demand for Austrian dessert apples was high. From August to December 2019, almost twice as many Austrian dessert apples were marketed as in the corresponding period of the previous year and interest continued unabated in the new year as well. Corona-induced hoarding additionally fuelled the already strong sales. In no other month were more apples sold than in March this year.

The average price per kilo for all varieties over the entire marketing year was at an extremely reasonable level, up 24% on the previous year. In July, the wholesale prices for dessert apples, conventional, reported to Agrarmarkt Austria were no exception and continued to rise. Remaining stocks of the Gala variety, in ready-to-sell packaging, were traded at an average of EUR 0.97 per kg, +3% on the previous month. Golden Delicious brought in EUR 0.84 per kg, the highest level in 22 months. Jonagold, at EUR 0.90/kg, saw a doubling of the price compared to year before.

Domestic stocks of dessert apples amounted to 12,433 tonnes as of 01.07. Apart from Golden Delicious, almost all relevant varieties of Austrian origin are sold out. The general conditions for a further market stabilisation and a successful start to the season are certainly in place, also with regard to moderate earnings prospects for 2020/21 throughout Europe.

Balanced carrot market
In line with the season, business was quiet and not much changed in terms of prices. The Lower Austrian producer prices for saleable goods packed in 5kg containers stagnated at an average of 47.50 EUR/dt, still at an acceptable level. At EUR 0.63/kg, the wholesale prices of Agrarmarkt Austria solidified by 5% compared to the previous month.

Onion prices under pressure
There are sufficient good quality onions on the market throughout Europe. The export business has been correspondingly restrained recently. At the same time, the comparatively low demand from the catering trade in particular caused sales of large calibres to collapse. Towards the end of the month, Lower Austrian producer prices therefore moved downwards in line with the market situation and initially settled at an average of EUR 16.50 per tonne at a low 2017 level.

Domestic potato market in an unbalanced situation
A very good spring led to good to excellent yields of native early potatoes. The follow-up varieties also showed strong clearing results. Only the sales, especially for the oversized potatoes which are abundant this year, are missing. While households continue to buy, the traditionally important Horeca markets are almost blocked due to a lack of capacity utilisation.

As a result, Lower Austrian producer prices were also on the decline in July as a result of supply and underlined the negative trend of the previous month with a manifest drop in prices. While at the beginning of the month it was still possible to get EUR 20.00 per ddt, with the average prices dropping by 40 % to EUR 12.00 per ddt by the end of the month. This resulted in a 200% price reduction on the admittedly strong price of the previous year. Due to the difficult international environment, there are hardly any notable exports that could bring relief to the domestic market. Free goods are virtually unsaleable.

At this point in time, nobody can say where the journey is heading, as the harvest of medium and late varieties is still in progress. In view of very well-filled (cold) storages -due to Corona- and the current price developments, this year's season will probably already be a challenge for many farmers.

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