Potato prices "could soar" next year

Potato prices could be set to soar next year as farmers across Europe rein in planting this season.

Prices in Belgium could quadruple next year from E20/t to E80/t, and in the UK prices could double from £100/t to £200/t, according to Cedric Porter of World Potato Markets.

The World Potato Markets 2012 Potato Market and Trade Review, predicts weather problems in Europe, combined with farmers deliberately growing less in order to boost prices following bumper harvests in 2011, could result in five per cent lower production across Europe in 2012. This would have a major impact on price, said Porter.

“Last year there was massive production, it really was exceptional in Belgium and Holland,” he said. “We are estimating potato production will be five per cent lower in 2012. It doesn’t sound much, but supply and demand is so finely balanced worldwide it is likely to have a significant effect on prices. In addition the drought will be an issue in the UK this year, and the recent weather has come at a bad time for potato planting.

"In Belgium the current price is around €20/t. This is likely to rise to around €80/t. In the UK prices are currently around £100/t. The cost of production is around £120 to £130/t and prices are likely to rise enough to cover costs. However there is potential for prices to go up significantly, depending on final production, possibly to around £200/t. In the drought year of 1976, prices were £600/t.”

Jim Davies, AHDB market intelligence senior analyst, said it was still early days to predict 2012 yields and prices in the UK. “Planting this year has got off to a good start, we have had warm conditions and about 60 per cent of the crop is planted. The wet weather this last fortnight means we are falling behind last year on planting, but there won’t be any official figures on planting until June. Another big factor affecting final production will be the growing conditions ahead,” he said.

Meanwhile, worldwide the global trade in potatoes and potato products is high. Strong Russian demand for fresh potatoes and continued growth in global demand for fries meant that the trade in potatoes and potato products rose by more than 11 per cent in 2011 to £6.8 billion, according to the World Potato Markets 2012 Potato Market and Trade Review. The value of the global market is likely to grow further in 2012 if, as predicted, production is lower.