Weather Shift Notches Up Crop Production, Benefitting the European Potato Starch Market

Germany: The Potato Starch market in the European region continues to exhibit a negative price trajectory. The drop in feedstock potato costs brought on by large production due to a strong supply of starch ahead of high production levels caused the price of Potato Starch to fall by up to 2.7% in April 2023. Due to the favorable temperatures in the region, which have facilitated simple logistics and shipping, the supply of vegetables, particularly potatoes, has recently increased. The sharp decline in domestic agricultural product prices has also aided the price drop for potatoes.

After a protracted, dry, and hot summer, the North-Western European Potato Growers (NEPG) zone's potato production has increased, helping the supply of Potato Starch to restore its downward pace. Germany and other European countries, including Ireland, produced more potatoes overall despite increased acreage due to climate change. Furthermore, until January 2023, summer heat waves have a negative impact on product quality and storage problems. Despite the fact that output has increased since February 2023 of this year, according to ChemAnalyst statistics, this has not stopped Potato Starch prices from falling in the domestic German market.

Given the substantial stocks in the production facility, European exports of Potato Starch surged. Overall, Potato Starch exports still show a small increase, but prices are falling due to plentiful supply and steady demand from outside markets. Manufacturers have done the same as traders, who reduced the export price to destock their commodities by filling recurring orders from foreign purchasers using existing stocks.

ChemAnalyst predicts a reduction in potato starch prices in the coming months. Inventory accessibility will result in a supply of Potato Starch being available in the local market, improving price trends. Potato Starch prices may also be lowered by acceptable demand fundamentals from a variety of downstream pharmaceutical and food sectors. Furthermore, considering the unstable market dynamics and unpredictable climate variability in Germany, it is also projected that prices may differ from forecasts.