19 January 2023
New data reveals startling figures.
EU potato contracts are now 20 to 30% higher as a result of increased production costs, a new report has revealed.
Higher costs are weighing on growers’ profit margins and driving the cost of cultivation and storage to unsustainable levels, according to a recent report by Mintec Global, an independent provider of global commodity price data and market intelligence for the food industry . Storage and drying costs also rose significantly as a result of higher year-on-year electricity costs. This has led to some growers selling off supplies earlier in the season to combat higher drying and storage costs.
In the 2022/23 season, demand for free-buy packing supplies was muted as many supermarkets contracted a higher proportion of their requirements to limit exposure to volatile potato prices. Therefore, significant driving factors, including higher input costs, have not been fully reflected in higher retail pricing.
Contract prices, which were, on the whole, finalised at the end of last year, have risen by 20% to 30% across the EU for the 2023/24 marketing year to account for this, which could potentially result in higher retail prices when the 2023 crop is harvested.