Credit: agrifoto.nl


PUTTING THE FRENCH BACK IN FRENCH FRIES Despite the faltering raw produce supply, European potato processors have seen steady growth over the last decade. It is mainly Belgium that is facing the consequences of its growing pains. Their potato industry increased its capacity by a whopping 366% in twenty years– (from 1.5 MMT to an estimated 7 MMT in 2023 according to sector representative Belgapom). This has put a large strain on the availability of farmland. That is why 40% of the industries’ need for potatoes is now coming from across its borders. Northern France – with its favourable Macron-governed economic climate and bountiful fertile soils – is keen to put the “French” back into French fries, by aiming to double its production capacity in the coming seven years. If they succeed, an extra 1.5 MMT of French fries will leave the factory doors in 2030. Potato giants Clarebout, Agristo and Ecofrost are fuelling this triple digit growth. Despite increased local processing capacity – mainly in Asia – EU and US processors are still baking in confidence when it comes to selling their produce. EU exporters have managed to increase their fry-prices by 75% in 3 years and are maintaining these high price levels.


FUTURES MARKET BACK IN ACTION Back to the pricing of potatoes. Due to increased capital outlay and more frequent weather extremes, growers are more than ever looking at ways of hedging their growing costs. Using the futures market is an ideal instrument, so you’d say. The opposite has been the case these last three years. Independent potato merchants and speculators quit and left the market. Increasing regulatory pressure isn’t helping new entrants to join either. In practice, this meant that the market was left for dead last summer, just as the season was heating up. Futures prices increased only reluctantly, whilst the physical market reached an all-time high of nearly €70.00 per 100 kg. After a lacklustre period, the futures market regained its momentum and is now breaking both technical indicators and records. The price increased from €20 in early October up to €39 and higher in early March. Such an increase is unheard of in – what is – traditionally a quiet part of the season.


Source: www.eex.com


10 | ADMISI - The Ghost In The Machine | Q1 Edition 2024


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