W12 Potato Update: Potato Processing in the Netherlands Hits 12-Year Low, Ukraine Witnessed Influx of Imported Potatoes

Netherlands Potato Processing Hits 12-Year Low in Feb-24

According to the Association for the Potato Processing Industry (VAVI), Netherlands potato processing hit a 12-year low, with only 1.46 million metric tons (mmt) processed until Feb-24, representing a notable decrease from the previous year's peak of 1.66 mmt over the same period. The peak was due to better yields in neighboring countries like Belgium, Germany, and France, which reduced the Dutch industry's reliance on domestically grown potatoes.

However, potato processing in the Netherlands for 2024 has experienced a decline due to extremely wet conditions at the end of 2023, which led to a prolonged period of land deliveries and some potatoes remaining in the ground, impacting the processing volume negatively.

Ukraine Witnessed Decline in Potato Prices Due to Influx of Imported Harvest

Since the beginning of W12, Ukraine has experienced a significant influx of imported potatoes from the new harvest, resulting in a noticeable decline in selling prices for local products. Over the past week alone, potato prices in Ukraine have decreased by an average of 12% week-on-week (WoW), ranging between USD 0.36 to 0.51 per kilogram (UAH 14 to 20/kg).

In contrast, newly harvested imported potatoes from Egypt and Azerbaijan were sold at a higher price range of USD 0.64 to 0.77/kg (UAH 25 to 30/kg). The increased availability of local products in the Ukrainian market, combined with warm weather, has prompted producers to expedite the sale of stored potatoes from the 2023 harvest and focus entirely on the upcoming sowing season. Additionally, the remaining potatoes sold are often of subpar quality. Despite the price decrease, potatoes in Ukraine are still 2.5 times higher than during the same period in 2023.

Moldova Faced Weak Demand for Borscht Set Products Planting Material

In Moldova, demand for planting material for most borscht set products was weak in the first two months of 2024. Sales of carrot and beet seeds are anticipated to hold steady at last year's levels. However, the potato crop sowing area for 2024 may experience a reduction of 10% to 15% year-on-year (YoY). Many professional vegetable farmers are considering reallocating part of their land this year from borscht products to cultivate tomatoes, sweet peppers, and melons, such as watermelon.

Egyptian Pound Devaluation Boosts European Potato Market

The sharp devaluation of the Egyptian pound (EGP), which escalated rapidly on March 6, impacted the European potato market. This devaluation coincided with the active potato export season from Egypt. As potatoes are a top export crop for Egypt and potato prices in Europe are reaching record highs, the currency devaluation was timely for this market. It has helped alleviate the tense situation with potato shortages and mitigate further price increases. Egypt ranks among the top 5 global potato exporters, supplying numerous countries worldwide.

Top markets for Egyptian potatoes include Russia, the European Union (EU), the United Arab Emirates (UAE), Lebanon, Iraq, Kuwait, and Syria, with exports even reaching distant destinations like Indonesia. However, challenges related to the Houthi terror in the Red Sea this season have added complexity to potato exports, making shipments from Egypt to EU countries particularly appealing.

Brazilian Wholesale Potato Prices Experience Significant Upward Movement in Feb-24

Wholesale prices for Brazilian lettuce, potatoes, onions, and tomatoes experienced significant upward movements in Feb-24. Although potato prices increased in February, the rate of increase was lower compared to Dec-23 and Jan-24, attributed to a higher supply of the tuber. Delayed planting due to weather conditions has postponed the arrival of the water harvest, leading to expectations of a later surge in supply. Early in Mar-24, prices in most Supply Centers (Ceasas) showed a downward trend, indicating an acceleration in the water harvest and increased availability of potatoes in the markets.