"The potato market is on hiatus," says Jan Van Luchene of Bruwier Potatoes, reflecting on the current situation. The market has been turbulent for several months, and with the new harvest approaching, there seems to be little improvement in sight. "Frankly, I don't see any way this can be resolved this season," he says.
"There has been a lot more planting in Europe this season," Jan continues. "And despite the dry weather since February, yields appear surprisingly high. Especially with the rain we had about 10 days ago, the kilos will be there. Of course, they still need to be harvested. Two years ago, we saw that there are always risks until the crop is in, and perhaps the only thing that could change the market is if certain areas cannot be harvested. Obviously, I don't wish that on anyone, but beyond that, I really don't see a solution to the problem at hand."
Industry's near absence
Jan notes that the new harvest will be much earlier than in previous years. "With the weather we have now, ripening will be a bit faster, so I expect we will be 2 to 3 weeks earlier than recent years, which could allow for storage by the end of September," he explains. "Unfortunately, I fear it will still be a loss for all uncontracted potatoes. One could kill off plots so that no more kilos are added and some value is retained in what's already there, but who will do that? I fear we will simply be left with extremely low prices."
Could the export market offer relief? "I think it's just a drop in the ocean. Maybe some export markets will buy more due to the low prices, but will it be enough to save the market? I don't think so. For the past decade, the market in Western Europe has been driven by the industry. They entered the market in January or February with expensive contracts, as we've seen over the last two or three years, then by March, they suddenly found the contracts too expensive and realised they had too many potatoes. This means the industry will be almost absent from the market unless chip sales recover."
Adjustment ahead
"Only the fries market is going to take a different shape in the coming years," Jan points out. "There's a bit more competition from around the world, so I think we'll just have to get through this year and then look for a new balance, with contract prices much lower than we've been used to. As a result, the planted area will be smaller, and we might return to a healthier situation. But first, we have to survive this transitional year."
Will the old normal ever return? "You never know. Never say never, because global consumption of fries continues to grow. That's not the issue. There are simply more shifts in the market now. But let's be honest: Over the past three years, we've seen very high food prices. The industry's profits during those years were certainly not bad either, but I think they lived beyond their means for a while with those selling prices. Now, a new price balance needs to be found. Adjustments have to be made. And that applies not just to the industry, but to the entire chain, from seed suppliers to growers and traders."
For more information:
Jan Van Luchene
Bruwier Potatoes
Galgestraat 1A
B-8790 Waregem, Belgium
Tel: +32 56 61 33 33
[email protected]
www.bruwier.be
