W9 Potato Update: Tight Supply and Rising Prices Amid Weather Challenges in EU and UK Markets

Published 2024년 3월 8일

In W9 in the potato landscape, the EU and the UK grapple with potato price increases due to supply constraints caused by adverse weather conditions. In the EU, lower production, quality issues, and increased reliance on imports contribute to supply disruptions and rising prices. Heavy rainfall during harvest further reduced the available supply, leading to the highest February price recorded in the Netherlands for processed potatoes. Similarly, challenging weather conditions in the UK have driven significant price surges, with popular potato varieties experiencing double-digit percentage MoM increases. Early market releases of stored potato stocks due to weather conditions raise concerns about potential shortages in both regions towards the end of the season.

Tight Supply Drives Up Potato Prices in the EU

The European Union (EU) potato market faces a period of price volatility and potential supply disruption due to lower production, quality issues, and increased reliance on imports. Demand for potatoes in the EU remains strong, while overall supply is declining. Many manufacturers lack sufficient good-quality potatoes to meet market needs, as quality issues caused by last year's wet harvest compromised storage potential. Producers with high-quality potatoes are aware of the scarcity and are seeking higher prices before selling. Heavy rainfall during harvest led to an estimated 650 thousand metric tons (mt) of potatoes being lost or left unharvested, further diminishing the available supply.

As a result of the supply constraints, potato prices are rising. The Mintec Base Price (MBP) for processed potatoes in the Netherlands reached USD 40.75 per 100 kilograms (kg) on February 27, 2024, the highest February price recorded since monitoring began in 2014. The potato shortage is impacting processing plants, processing 10.8% year-on-year (YoY) fewer potatoes in Jan-24. The Netherlands, a major potato processing hub in the EU, is increasingly reliant on imports from neighboring countries to meet demand. Imports accounted for 33.2% of total potato supplies in Jan-24, compared to 21.4% in Jan-23.

UK Potato Prices Rise Following Adverse Weather Conditions

Potato prices in the United Kingdom (UK) have experienced a significant surge in recent months, driven by challenging weather conditions. The cost of certain potato varieties has risen by up to 22% month-on-month (MoM), with popular varieties like Maris Piper experiencing an increase of over 10% MoM across major retailers. Recent storms have left agricultural fields waterlogged, impacting potato growth and leading to "challenging growing conditions" as described by leading supermarkets. Retailers are adjusting size and shape standards to accommodate previously undesirable potatoes and potentially mitigate price fluctuations.

The National Farmers' Union (NFU) highlights the challenges faced by potato growers due to weather extremes ranging from droughts to heavy rains since the beginning of H2-22. This has resulted in early market releases of stocks meant for storage, raising concerns about potential shortages towards the end of the season. The British Retail Consortium (BRC) assures that supermarkets are experienced in managing such disruptions and are aiming to minimize the impact on customers. These weather-related challenges extend to other UK-grown vegetables, potentially increasing reliance on European imports.