Belgapom processing potato price falls to ZERO Euro amid market oversupply

The price of potatoes intended for industrial processing has fallen to EUR 0 according to the price quotation issued by sector federation Belgapom. The price of maincrop potatoes, grown for long-term storage, has been falling for months due to a lack of demand and dropped to EUR 10 per tonne (USD 11 per tonne) in March.

The price applies to the price of maincrop potatoes on the open market, sold to large chip producers. 70 to 80 per cent of the harvest has been tied to a higher contract price for months, with the remainder offered on the open market.
 

Lack of demand drives prices to zero

In recent weeks, no price was set due to a lack of trade. Christophe Vermeulen, CEO of Belgapom:

"Farmers have sold their potatoes, but at EUR 0 (USD 0). Anything is better than ploughing them in or destroying them."

Many growers are left with large surpluses due to lack of demand, resulting in a stockpile of a few hundred thousand tonnes, while the season for maincrop potatoes still has several months to run.
 

Market imbalance and limited alternatives

The major chip producers have sufficient stock, while competition on world markets is increasing. Alternatives such as processing the potatoes into animal feed or biofuels are only possible to a limited extent.

There is not likely to be an impact on retail prices. The surplus applies to potatoes that are turned into frozen chips by industrial processors. Higher prices are being paid for table potatoes, or varieties cultivated for direct consumption.
 

Processing sector adjusts operations

Last month, Clarebout Potatoes implemented temporary unemployment, and Lutosa cancelled weekend work due to overcapacity in the market.