European Potato Market Faces Lower Production Amid Adverse Weather Conditions
The European potato market is bracing for a significant production decline in 2024. The forecast for this year's harvest stands at 20.7 million tonnes, representing an 8.8% decrease from the 2023 harvested production. This sharp drop is attributed to unfavorable weather conditions and increased disease prevalence across the North-Western European Potato Growers (NEPG) region.
Adverse Weather Impacts Potato Yields Across Europe
Farmers in the NEPG region have faced exceptionally challenging conditions. Prolonged wet weather and disease outbreaks have severely impacted potato growth and yields. Although the hectarage dedicated to potato cultivation is expected to increase by 4-6% year-over-year in 2024, these gains are overshadowed by the adverse weather conditions.
The EU Commission has projected a harvest yield of 35.1 metric tonnes per hectare, 4.6% lower than last year's yield of 36.8 metric tonnes per hectare and 1% below the five-year average. The most severe impacts are seen in Belgium and the Netherlands, where yields have declined by 11% and 6%, respectively. France and Germany are also facing reductions, with year-over-year drops of 4% and 2%.
Southern Europe Fares Better Amid High Temperatures
In contrast to the Northern regions, Southern Europe has managed to maintain relatively stable potato yields despite high temperatures. The use of irrigation has been crucial in preserving crop health in Spain and Portugal, where farmers have successfully mitigated the effects of adverse weather conditions. This resilience has provided some relief amidst the broader challenges facing the European potato market.
Global Potato Starch Market on the Rise
While European potato growers contend with production issues, the global potato starch market is experiencing robust growth. Valued at over USD 6.70 billion by 2032, the potato starch industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 4.47% from 2024 to 2032. The surge in demand for processed and convenience foods, especially in developing countries like China and India, is a significant driver of this growth.
Interestingly, the use of potato starch is expanding beyond the food industry, finding applications in sectors like paper, textiles, and pharmaceuticals. The shift towards clean-label and gluten-free products is also boosting the market, as consumers increasingly seek natural and whole-food options.
Potato Starch Prices Surge Amid Tight Supply
Potato starch prices in Europe have continued to rise, reflecting the challenging production situation. With high demand from the food, pharmaceutical, and packaging industries, and ongoing supply chain disruptions, prices are expected to remain elevated until the end of the year. Economic recovery and increased consumer confidence are adding additional pressure to an already tight market.
Potato Flakes: Growing Demand Meets Supply Challenges
The market for potato flakes is experiencing steady growth, driven by rising demand for prepared meals, particularly in the foodservice industry. However, the supply of potato flakes is critically low due to difficulties in sourcing high-quality raw materials. As more consumers adopt vegan and vegetarian diets, the demand for potato flakes, used as a thickening agent in soups, sauces, and other products, has increased significantly. In Asia, particularly Japan and China, there is a growing interest in mashed potatoes and other potato-based dishes.
Despite this positive demand trend, the market faces several challenges. Fluctuations in raw potato quality can lead to lower-quality flakes, potentially damaging brand reputation. Additionally, potato flakes are competing with alternative thickening agents such as arrowroot and cornstarch, which can offer similar functionalities.
Potato Protein: Rising Demand in Plant-Based Foods
As of August 2024, the demand for potato protein is on the rise, particularly in the plant-based food industry and grain-free pet food diets. The functional form of this protein, known as patatin, is highly sought after for its application in plant-based dairy products, meat substitutes, and other health-conscious foods. This trend reflects the broader consumer shift towards healthier, more sustainable food options.
What Lies Ahead?
The European potato market is navigating a complex set of challenges, from weather-induced yield declines to fluctuating raw material quality in derivative markets. However, the global demand for potato-based products, particularly in the starch and protein sectors, remains robust. As the industry adapts to these evolving conditions, staying informed and agile will be key for stakeholders across the value chain.
