Logistics And Frieght Forwarding

Unusual Market Dynamics in Northern-European Potato Trade

Currency and supply dynamics are affecting the relative price of British processing potatoes compared to supplies from Belgium and the Netherlands, according to the Agriculture and Horticulture Development Board (AHDB).

“Presently the ex-farm value of GB processing potatoes sits at EUR70-EUR80 per tonne lower than comparable Belgian and Dutch quotes – an unusual position for the GB crop compared with previous years’ prices,” said Arthur Marshall, Market Intelligence analyst for AHDB.

Last season, ex-farm prices for Belgian and Dutch processing varieties were either fairly similar or the GB price point was higher. “The price gap has grown dramatically in the last couple of weeks due to Belgian and Dutch prices rising, alongside the falling value of sterling – making GB prices lower in euro terms,” Marshall adds.

An extremely tight supply situation on the continent is serving to bolster the price of processing varieties there.

“Belgium is experiencing harvest delays, limiting the amount of nearby supplies available. Harvest reports week ending October 14, indicated the position as less than half complete with the ground often too dry,” Marshall mentioned.

Against the euro, the value of sterling has dropped 15% since the vote for Brexit.

This rapid weakening of the pound’s position has affected relative prices of GB and Belgian/Dutch processing potatoes, resulting in the GB price point falling below.

“This situation may encourage enhanced export activity from the UK as GB-produced potatoes prove a comparatively cheaper option for Northern European buyers, even after accounting for haulage costs,” expands Marshall. “However GB growers will be taking stock of their storage position at this point and judgments need to be made on pursuing exports in the short-term against being prepared to fulfil domestic markets in late spring,” he said.

Domestic prices for GB processing potatoes have held firm this season with values higher than typical for this time of year, apart from the challenging supply situation of 2012.

Related articles: A Better Perspective on Potato Processing: AHDB Potatoes’ Next Generation Visited McCain[1] AHDB and CEJA Comment on Vote to Leave EU[2]

AHDB launches website to improve potato chips quality[3]

AHDB Next Generation group explore potato processing[4]

AHDB: Four Projects to Unearth the Secrets of Profitable Soils Throughout the Rotation[5]

References

  1. ^ A Better Perspective on Potato Processing: AHDB Potatoes’ Next Generation Visited McCain (www.potatobusiness.com)
  2. ^ AHDB and CEJA Comment on Vote to Leave EU (www.potatobusiness.com)
  3. ^ AHDB launches website to improve potato chips quality (www.potatobusiness.com)
  4. ^ AHDB Next Generation group explore potato processing (www.potatobusiness.com)
  5. ^ AHDB: Four Projects to Unearth the Secrets of Profitable Soils Throughout the Rotation (www.potatobusiness.com)



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