W8 Potato Update: Dutch Seed Potato Decline Raises Concerns for Global Food Security, Ukrainian Market Sees Price Adjustments Amidst Increased Supply

Dutch Seed Potato Sector Grapples with Shortages and Shrinking Cultivation Area

The Dutch potato sector is grappling with concerns regarding the availability of seed potatoes, raising potential implications for future production and global food security. The area dedicated to seed potato cultivation in the Netherlands has been declining for three consecutive years, with the 2023 figure reaching 38.8 thousand hectares (ha), marking a 6.5% year-over-year (YoY) decrease. This trend is also observed across other major European Union Five (EU5) potato producers, with the total area shrinking from 93 thousand ha in 2020 to 84 thousand ha in 2023.

The 2023 season witnessed a lower-than-expected seed potato yield, further exacerbating the existing concerns about availability. Anticipating a shortage, a rise in seed potato-cutting practices is expected, potentially impacting the quality and quantity of available planting material. While the anticipated decrease in planting area might initially contribute to favorable price formation for seed potatoes, a potential repeat of low yields in the coming year could lead to a more challenging scenario. The perceived heightened risk associated with growing seed potatoes, due to factors like a shrinking crop protection product portfolio, is leading some growers to shift their focus towards cultivating consumption potatoes instead. This shift further reduces the overall pool of seed potato producers.

The Netherlands plays a critical role in the global seed potato supply chain, contributing to food security by providing high-quality seed potatoes that help feed approximately one billion people worldwide. A sustained decline in Dutch seed potato production could have significant global repercussions, potentially impacting food security in various regions. While some key industry representatives see potential benefits for price formation in a situation where demand exceeds supply, concerns remain regarding the long-term sustainability of seed potato production in the Netherlands and the European Union (EU). Emphasizing the importance of seed potato cultivation and implementing strategies to address the challenges growers face is crucial to ensure the continued availability of high-quality seed potatoes and their contribution to global food security.

Ukrainian Potato Market Sees Increased Supply Amidst Falling Demand and Prices

The Ukrainian potato market experienced a significant increase in potato supply in W8, coupled with a decline in demand and deteriorating product quality, leading to price adjustments. Farmers who previously held back on sales in anticipation of higher prices have begun offloading potato stocks, leading to a notable rise in market supply. The quality of some stored potatoes has deteriorated, potentially impacting their marketability.

Despite the increased supply, price reductions haven't stimulated demand. Farmers are offering high-quality potatoes at a price range of USD 0.37 to 0.52 per kilogram (kg), representing an average decrease of 12% week-on-week (WoW). Despite the price reduction, buyer interest remains extremely low. Potatoes remain significantly more expensive in Ukraine, with current prices averaging three times higher year-over-year. Given the low demand and current market situation, Ukrainian farmers anticipate the possibility of further price decreases in the potato segment.