Plummeting potato prices don’t mean chips will be cheaper

Potato prices have plummeted to a couple of cents a kilo in the last few months, but the cost of French fries at the local snack bar has not come down, broadcaster NOS reported on Tuesday.
Farmers are getting just a few euros for 100 kilos of potatoes on the free market, compared to €30 to €60 some months ago.
Prices were much higher in the past few years, prompting Dutch and international growers to increase yields and that has led to the price collapse, experts say.
But low potato prices don’t mean a bag of fries will become cheaper, Frans van Rooij, from professional fryers association ProFri told NOS, citing the cost of equipment, staff and oil.
According to Rabo Research economist Barend Bekamp, the Netherlands could profit from the worldwide surge in demand for French fries. China’s fast food sector is growing, he said, and Dutch potato processors Aviko and McCain are already building new processing plants in Asia and Europe.
Economists agree that the market is facing challenges. It is unclear, for example, how quickly the Asian market will grow and if these countries will grow their own potatoes.
Even so, De Ruyter said the Netherlands remains competitive in one key area. “We’re still strong in the seed potato market – the potatoes you plant to grow more.”
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