Frozen Fries Index is mimicking the potato price

Both the price level for raw potatoes and that of frozen fries, in the DCA Frozen Fries Index, remained flat during week 44. This has everything to do with a complete lack of demand and oversupply of the market.The Open Market Index, concerning Fontane potatoes as raw material, was unchanged during week 44 with a price of €169 per tonne. The Fastfood Index (Innovator potatoes) and 70-30 Index also showed very little change. It’s the same story with the raw potato market. It displays some green figures but looks can be deceptive. Quality issuesCold stores in the EU-4 countries are filled to the brim with deep frozen fries. Factories are meanwhile taking a laid back approach to fries production, which means that production lines – or even whole factories – are stopped for certain periods of time. All this doesn’t help the potato market. What also isn’t helping is a relatively large portion of previously produced fries that are of a lesser quality. An inheritance from the previous season when, due to a seed potato shortage, second grade varieties were grown for the processing segment. Most of these were processed, but the result is far from satisfying.Trade figures show that the global demand for fries was still increasing up to at least July of this year. It’s the European and US producers that are missing out sales, which are taken up by Chinese, Indian and Egyptian companies.Expensive potatoesEuropean potato processors have implemented significant price reductions in recent weeks. It’s an ultimate bid to pick up more sales. The effect will be unclear for some time as there is a three to four month delay in trade figures. Meanwhile they are obliged to collect and process expensive contracted potatoes – seen in the light of the current open market – which is also shown by the Fastfood Index. With €600 per tonne there is a lot of difference compared to the Open Market Index.