NEPG Concerned about Low Free Buy Prices, Negative Signal to Growers

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During recent weeks, free buy potato prices in Northwest Europe have dramatically fallen to the point where farmers in Belgium, France, the Netherlands and Germany can no longer cover production costs, according to the NEPG. The growers association has pointed out that that even if there is a logical link between offer and demand (the current very low free buy potato demand is due to much higher contracted volumes and more offers of non-storable potatoes) there also must be logic between quotations and real exchanged volumes.

In the virtual absence of demand real free buying volumes are currently very low, leading to indicative quotations in a very narrow market. The North-western European Potato Growers foundation is urging producers to take all necessary precautions when considering these quotations, and “not succumb to panic, as market fundamentals remain robust over the long term of the campaign. Hence the importance of storage.”

The NEPG reminds all parties that the needs of the European processing industry in future months should amount to an additional 2,000,000 tons compared to requirement two years ago, and that future price perspectives are good.

Moreover, it says that the current low free buy prices are not an incentive for growers who need to be reassured for future plantings which will be done in an ever more difficult context. Additional economic, legislative, technical and climate change constraints make potato cultivation increasingly risky and difficult.
“Each stakeholder in the European potato industry should take into account all of this information if their goal is to maintain the momentum of their supply for the next campaign,” stated the NEPG in a press release issued from Gembloux, Belgium on September 29.