Belgium: Potato market could be close to disaster next season

With a few months to go before the 2024/25 season is over, the mood is depressing. The high expectations regarding prices that existed until a few weeks ago – looking at the two previous seasons – have been completely shattered. The bottom of the market is €15 per 100 kilos for Fontane and Challenger and is also listed as such by the German Reka on Friday 11 April. Belgapom was unable to provide a quote earlier in the day due to the lack of transactions. The 2024/25 season will go down in history as one of extremes. For example, the futures market for the April 2025 contract was quoted at almost €40 at its peak. With two trading weeks left before settlement, the final cash settlement will come in at around €17.50, a good halving compared to the highest price level.

Is the poisoned chalice completely empty?, could be the question. Not recording the Belgapom is a bad sign. Processors are not on the market, even if it is only to collect the contracted potatoes and the kilos supplied for which, in the case of Fontane, no more than €15 per 100 kilos is paid. If a grower does not think that is enough, they have no problem leaving the potatoes behind. Processors do not seem to want anything extra, or to be able to use them. According to insiders, the processors are said to have postponed the contracts and bought more on the free market earlier this year. With a sharp decline in the sales of fries, they therefore have sufficient raw materials available with all the consequences (read: no market).

Turning like a leaf on a tree

The turning of the potato market like a leaf on a tree comes at a very bad time. The choice with regard to the area was made at a time when the mood in the potato and French fry market was very good. The expectation for the 2025 harvest is therefore a considerable expansion of the area. For example, Viaverda published this week that an expansion of more than 5% of the area of ​​the main harvest is expected in Belgium. Within the range of varieties, Fontane will be the largest with almost 70% of the total area of ​​storage potatoes.

With a significant expansion of the area in the EU-4 countries and the knowledge that ’old’ harvest potatoes will end up in a major downturn, the starting position for the coming season is far from positive. If no disaster occurs (extreme drought, excessive rain during harvest time, etc.) it will be a disaster, is a winged statement that you hear in the market. Many growers are not losing any sleep over this for the time being. After all, most potatoes have been fixed at excellent prices. However, after harvest year 2025, another harvest year is in the offing and it would be short-sighted not to see the rather dark clouds in the sky that was clear until recently. A substantial volume of the potato harvest will be settled one way or another on the daily market (think of pool, co-delivered and free potatoes). If these do not reach the cost price level, this will cause a major dent in the average yield per hectare within a crop whose cost price is only increasing further.