Aviko has expanded its processing capacity for potato fries throughout Europe, or is in the process of doing so. Therefore, the processor is looking for more potatoes in its procurement regions for the harvest year 2025. Aviko is keeping the prices in the fixed price contract for this year unchanged. 'Conscious continuity has been chosen,' says director Dick Zelhorst.
Last harvest year, Aviko increased its contract prices in response to the significantly increased cost price. For the 2025/26 season, the processor is sticking to this price level. The company hopes to secure more volume next year. This is necessary to utilize the additional processing capacity in both domestic and foreign markets. Expansion is also taking place in Poland - where the company has a joint venture with Farm Frites - and in the Belgian town of Poperinge, more is being extracted from the existing lines. Aviko is also significantly increasing its production capacity in China.
The contract prices remain unchanged throughout all delivery periods. For Fontane (A-segment), this means a price level of €175 (ex-farm), €268 (week 17), and €295 (week 26) per ton. For Innovator (AAA-segment), this translates to €195, €288, and €315 in the respective periods.
More Expensive Seed Potatoes
According to Aviko, it can access sufficient seed potatoes for the factories' needs this year. The availability, both in terms of varieties and size grading, is adequate. However, the company finds it necessary to increase prices. 'Last year, we only implemented a limited price increase because we could fall back on multi-year agreements with the seed potato houses,' explains Zelhorst. 'The majority of these multi-year contracts have expired this year, which is why we cannot avoid higher selling prices.'
As the first processor this year, Aviko chooses not to change the prices in the ex-farm segment. The company sees no reason for that. Zelhorst: 'In addition to fixed price contracts, we naturally have our ex-farm and storage pool, but do not forget the futures market contract (click contract) either.' The director considers the turnover increase achieved in the futures market in recent months positive. However, the volume to be traded needs to increase further.
Cost Price
Shouldn't the contract prices rise again this year, given the increasing cost price and greater risks? That is what potato growers advocate for and what interest groups VTA, NAV, and POC also say. Zelhorst: 'In the past, Aviko introduced the cost index contract, where the cost price development serves as a guideline for the contract price. With the strong increases in recent years, we saw that the contract lagged behind reality, despite an additional premium. Therefore, we chose to pause this contract. It may change in the future. The difficulty is that especially the land costs vary enormously between individual companies, making it impossible to speak of a single cost price.'
World Market
According to the processor, he has no complaints about the sales of end products, but Aviko notices that global exports from the EU have decreased. 'In addition to lower sales, there are two other important developments,' notes Zelhorst. 'On the one hand, processing capacity is increasing worldwide, with new factories in South America and Asia. Besides supplying internal markets, they are sometimes competitive in the export market. This is seen in Asia, but also in Egypt. That country is producing more and more fries.'
Despite these challenges, the director remains positive about the future of the potato sector in the EU. 'In Northwest Europe, we are in a unique position that offers many advantages in terms of cultivation, processing, and export. The demand for products is still increasing across the board.'
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