Never before has so much money been made with fries – News Potatoes

Never before has so much money been made with fries – News Potatoes
Never before has so much money been made with fries – News Potatoes
--

The export figures for December, from the harmonized trading system, can complete the puzzle for 2023. It was already clear that it was a top year for the major chip manufacturers in the five most important European countries. Compared to the first half of the year, customers have clearly bought fewer fries in Europe. Partly because of greater competition, but mainly because of the sky-high price level.

1.2% more exported
French fries exports from the EU-5 (the Netherlands, Belgium, France, Germany and Poland) will amount to 6.1 million tons for calendar year 2023. That is 1.2% more than the year before. Not a shocking difference, but compared to five years ago you are still talking about a production growth of more than a million tons of fries.

In the first six months of the year, the momentum was good and the factories once again recorded strong growth figures. Exports were then well ahead of 2022. Sales clearly declined in the autumn and winter months, as is also visible in the monthly figures. More than 3% less was exported in December than in the same month a year earlier. This is mainly due to fewer sales from Belgium and the Netherlands.

Volume king
Belgium is the absolute top export country. This volume king exported 3.16 million tons of fries in calendar year 2023. An increase of almost 2% compared to the previous year, which amounts to 55,000 tons. Exports from the Netherlands actually declined slightly last year, to 1.95 million tons. That was 1.98 million tons a year earlier. While Belgians are still fully committed to volume growth, and can fall back on potatoes from France, the situation in our country is considerably stretched.

In percentage terms, France has done the best of the five countries. Exports increased 10% to 450,000 tons. Poland also did quite well in percentage terms with more than 200,000 tons. Exports rose 8.5%. Germany saw its volume shrink by 5% and in terms of volume (with 320,000 tons) it is between the other two countries. That has everything to do with the price level of the product.

Increasing margins
Looking at the export value in euros, there must be a jubilant mood in the boardrooms of the major potato processors. After the corona pandemic, the value of a ton of frozen fries started to rise and that increase has not yet come to an end. With lower production costs (energy, frying oil, packaging material) and an improved logistics situation, margins will only increase.

The value of chip exports in the EU-5 has increased by almost a third to €7.78 billion. A year earlier that was still €5.9 billion. Belgium has the largest share in this with almost €4 billion. This country also saw its turnover increase the fastest with 37%. In the Netherlands that was a quarter. More money has been made from fries on all fronts. Both inside and outside the EU.

Belgium no longer the cheapest
The price of a ton of fries – which also increased in December – is on average the highest in Germany. In one year it increased by 30% to €1,328. Belgium, traditionally the prize fighter on the world stage, had to give up this position to Poland. The Belgian price level averaged €1,240, compared to €1,200 in Poland. The Netherlands is also quite at the top with an average of €1,320 and saw its average price level increase by a third.

On continental Europe, the United Kingdom remains the largest customer for fries, although the volume decreased. France is in second and Spain in third place. Outside Europe, Saudi Arabia is the largest buyer. This country purchased slightly more fries. The United States purchased 12% fewer fries, but remains number 2 in terms of volume. Brazil is in 3rd place. This country actually purchased 15% more product.

Resistance is growing
Calendar year 2024 will probably look different for the EU-5. Resistance to increasingly expensive fries is increasing on the global market. This results in fewer absolute tons, but the higher monetary value partly makes up for this. What has changed is the return of North America to the export scene, after several difficult years. It is a small advantage that the US and Canada are quite high in price terms in the market, so that the EU can also participate with a good price. Even if the price slows down slightly, factories can still make very good margins in the current market situation.

The bottleneck for Europeans remains the supply of sufficient potatoes, although you would not say so given the figures for 2022/23. There are still quite a few production expansions planned, but there are not enough potatoes to keep all those lines full. The contract prices for French fries potatoes can be called attractive. At these chip prices, factories can easily maintain that price level and thus further boost cultivation. This means that potato cultivation will remain positive in the coming years, despite all the challenges in cultivation.

The article is in Dutch

Tags: money fries News Potatoes

-

PREV Budget benz for whom a C-class is too expensive –
NEXT VDL has been hot on the heels of Van Hool in the US since last year