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War in Europe: NEPG notes rising production costs, continued global need for potato products

European potato field. Courtesy: European Potato Processors’ Association (EUPPA)

Following the Russian invasion of Ukraine, potato markets have been somewhat resistant with uncertainty expected for the coming recent weeks, North-Western European Potato Growers (NEPG) says in a news release.

The European industry body:
"But there is no reason why open market prices or sales of processed products in the European Union and abroad should change much. The processing activity in the NEPG area is good, operating at the maximum of its current potential and processors still need potatoes."
Nevertheless, NEPG notes that uncertainty remains regarding the availability and costs of cooking oil (short and longer-term), as well as logistical difficulties (drivers and trucks, containers and shipping) and the resulting higher costs.

At the beginning of this year, production costs for the upcoming season were expected to increase by 15-20%, NEPG says. Gas, oil, and electricity have seen prices soar since the beginning of the Russian invasion of Ukraine. The same is true for fertilizers, mainly for nitrogen and potash.

"All these increases will inevitably have an impact on all the prices of raw materials and products related to potatoes."
Areas originally intended for potatoes will most likely be sown with spring cereals, grain, corn, or sunflower. Some potato growers have contacted processors asking for higher prices or more flexible conditions. All players in the potato chain face higher production costs, NEPG notes. The dry and hot spring and summer make things even more complicated for everyone in the potato industry.

"Producers need to realize that, despite this very significant crisis, our European countries (and others around the world) will continue to need potatoes and potato products in the future."