On September 6, the Mintec Benchmark Prices for processing potatoes from the Netherlands increased by 7.0% month on month (m-o-m) to EUR246/metric ton, a rise of 82.2% year on year (y-o-y).

Drought concerns fueled the recent price increase, with warmer-than-average temperatures and a lack of rainfall across the EU leading to a downward revision in yields in August.

Furthermore, growers have seen significant increases in production costs, such as fertilizer, pesticides, and energy, which are likely to be passed along the value chain to consumers.

“According to market sources, some producers have delayed desiccation and harvest to allow for additional time for crops to bulk. However, harvest is now in full swing and yields are highly variable at this point,” Alice Witchalls wrote for Mintec.

On the demand side, rising living costs and fears of a recession may boost potato demand. The Consumer Price Index (CPI) in the United Kingdom increased 10.1% year on year in July, owing primarily to significant increases in energy costs. This figure is expected to rise during the winter, and consumer budgets are expected to tighten as energy spending rises as households turn on their heating.

As budgets tighten, consumers are expected to choose products that offer good value for money and have a long shelf life, such as raw potatoes and processed potato products. With the possibility of lower yields across the continent, any shift in demand in the coming months will be a key determinant of prices in the 2022/23 season.