NEPG: There Must be a Logic Between Quotations and Real Exchanged Potato Volumes

Free-buy potato prices from several North-Western European quotations have sharply decreased over the past few weeks, making it impossible to cover manufacturing costs.

“The NEPG stresses 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 offer of non-storable potatoes - there also must be a logic between quotations and real exchanged volumes,” according to a recent NEPG press release.

Real free-buy potato volumes are now very low due to the virtually nonexistent demand, resulting in indicative quotations in a very small market.

“Producers must take all necessary precautions when considering these quotations, and not succumb to ‘panic’, as the market fundamentals remain robust over the long term of the campaign, hence the importance of storage. The NEPG reminds us that the needs of the European processing industry for future months should be an additional 2m tons compared to the one two years ago and future price perspectives are good. Moreover, the current very 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,” the NEPG representatives concluded.