Widening prices on the horizon?

Friday, 7 February 2020

As we enter February, lifting is still ongoing across GB as growers attempt to salvage crops still left in the ground. The potatoes that are coming out are often of questionable quality and quick movement is a priority given the risks of breakdown. Currently processors are utilising newly lifted crops and those which do not meet frying spec are being repurposed into alternative product lines. Moving newly lifted crops and the ample supply of secondary material seems likely to put pressure on prices in the lower end of the market.

In the bag market, prices for good quality frying material have remained firm, despite low demand form chip shops. Overall movement has dipped post-Christmas and the trade has noted difficulties with end users rejecting loads on a quality basis.

Packhouses continue to source material under contract with limited free-buy trade. The boost in contracted area this season has meant that packers need less free-buy and purchases are often limited to “top-up loads” where required. A good volume supply continues to flow out of Scotland south of the border. There appears to be higher availability for packers than in other sectors and the availability of Scottish supplies is likely to continue to weigh on English prices throughout the season.

As previously mentioned, processors are utilising as much of the newly lifted crop as possible to help mitigate a potential shortfall in supplies. This is working for some but for products with tighter specs, specifically crisping, rejections are high and these loads are often being sold for French Fry manufacture.

Moving forward we are likely to see a widening price difference based on quality as increased volumes of lower quality supplies enter the market depressing prices. However, for those with best material prices are likely to remain firm in the short-term, despite limited free-buy demand. There is some possibility that we could see increased levels of imports to help offset any domestic shortfall in frying supplies. However, with more crop coming out of the field in the short-term most are likely to rely on domestic supplies.

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