Aviko Sees Likelihood of Higher Potato Prices Ahead

The 2014 potato crop year in Europe is slowly coming to an end, with an EU-5 yield of 28.6 million tons – over 4 million tons more than the previous year – due to extended acreage combined with optimal weather conditions, Aviko reported in an e-newsletter issued on June 19.

The Steenderen, Holland-headquartered producer of value-added frozen and chilled potato products pointed out that the lack of demand for the exportation of fresh potatoes and over supply from growers resulted in a significant surplus leading to low prices.

Recently, however, prices have been edging upward.

“With cold, dry weather resulting in a late spring and delayed development of the 2015 crop, as well as the fact that the 2015 EU-5 acreage has decreased by 2-3%, market sentiment has slowly turned during the last few weeks, increasing prices in May and early June,” reported Aviko. “Belgian processers in particular worry about a smooth transition between crops, and doubts have arisen about whether or not the new early crop will be sufficiently available in time. We expect, however, that enough of the old crop will be available until the industry switches to the new crop throughout July.”

crop-update

With another four months of growth ahead, Aviko did not want to predict what the main crop of 2015 will bring to the industry in terms of availability, quality and pricing. “But with decreased acreage, the expectation of a lower yield and an increasing production capacity in Belgium, it is likely we will see higher prices than last year,” concluded the company.