The Belgian free potato market is currently in transition, with products not always easy to come by. "That's typical at the turn of the year. Short-storage growers have sold, and long-storage growers are waiting it out," begins Jan Van Luchene of Bruwier Potatoes.
And, adds the trader, price increases are usually set around the festive season. "That results in good demand but stagnant supply. Prices pick up, and in a rising market, people are always hesitant to sell. The hope, then, is always that prices will keep climbing. Those doing lengthy storage have had to incur hefty costs, which only keep climbing. People want to recover that expense by adding to the cost price."
© Bruwier Potatoes
There are other reasons for the limited market supply. "For example, many growers have had dismal returns. They must first fulfill their contracts, then see what's left for the free market. Also, off-land prices were so high that growers with free potatoes immediately enter that market. There was also no reason to wait when potatoes were selling for €25," Jan admits.
Two different markets
"Demand, however, remained, especially from the industry." It could, he believes, result in two different markets. "If prices keep, inevitably, increasing, I think it will be tough for the export market to follow. That will lead to a pricier industrial market and an export one that will remain just below that - prices there have to remain feasible," explains Jan.
"Then add that transport costs to Eastern and Southeastern Europe aren't what they were two years ago either, and you get a tough situation." One that applies to much of Europe. "A few years ago, we could still look to Poland in case of shortages, but that makes no sense this year. All of Europe has almost the same yield issues," Van Luchene continues.
Risky free market
The free market problems are not expected to be easily solved this year. "Until this season, contract prices allowed free market speculation. With the recent years' nondescript crops, that often paid off. Next season's contract prices have, however, risen so much that I wonder if people will still risk entering the free market."
"The harvest will have to be truly disastrous for them to come out better. That will make it all the more difficult for the free market. Contracts will be concluded more quickly, but that certainly doesn't mean net profits will also be higher. Not by a long shot. With current rising costs, margins remain incredibly tight, making it even riskier to remain on the free market," Jan concludes.
For more information:
Jan Van Luchene
Bruwier Potatoes
1A Galge Street
B-8790, Waregem, BE
Tel: +32 (0) 566 13 333
Email: [email protected]
Website: www.bruwier.be
