After the Belgian commission price was no longer fixed by the Belgian federal ministry in February 2001, as a result of the regionalisation of the department of agriculture, Belgapom has taken the initiative to publish their own Belgapom quotation starting with the season 2001-2002.
After the Commission price for potatoes was no longer recorded by the federal ministry from February 2001 due to the regionalization of the agriculture department, Belgapom took the initiative to publish its own Belgapom quotation starting from the 2001-2002 season.
Ten companies, five active in potato trading and five in the potato processing industry, report the prices they have paid for potatoes each week. The most common price is then recorded as the Belgapom price every Friday morning. Thus, the Belgapom quotation is the most common price on the physical market for potatoes intended for frozen fries.
This Belgapom quotation is included in the basket of European quotations, from which the cash settlement price of the futures market in Frankfurt (Eurex) is calculated.
Since 2011, a Belgapom quotation has been determined every Friday morning with the following definition: "The Belgapom price is the most used price observed on the previous working day for variety X for processing into frozen potato products, field crop 35 mm+, suitable for fries, ex-producer, loose on truck, for immediate delivery/pick-up."
The committee also provides a market sentiment chosen from the following definitions:
The price quotation is displayed in Euros, both including and excluding 6% VAT, and per unit of 1,000 kg or 1 ton.
Since September 3, 2021, the following varieties, based on the same definition, are published weekly in the Belgapom quotation: early potatoes (if applicable) and Fontane. For the Bintje and Challenger varieties, only an observation and a market sentiment are included in the communication.
The committee reserves the right to not determine a Belgapom price under special circumstances. The motivation for this decision will be provided by the committee.
In recent years, the Belgapom quotation has established itself both domestically and internationally as a reliable source of market information, providing the sector with a database that reflects the Belgian physical potato market and can be consulted at any time.
The Belgian potato season for the production of consumer potatoes destined for the chip industry can be divided into two parts:
As far as the available half-early and late fries varieties are concerned, Fontane has become the major variety with a share of 50% in the Belgian acreage.
Other varieties as those for the fresh market, chips (crisps) and snacks and also other frozen products are often only produced and stored on contract.
Growers, dealers and processors can market potatoes both during the early and the storage season by means of :
- volume of culture contracts (whereby a fixed volume of potatoes, with disposals concerning variety, quantity, quality, the moment of delivery and the price are defined in the contracts for volume contracts, and the yield of one or more parcels of potatoes of a certain variety based and crop instructions are sold to the buyer for a certain price at a certain time for culture contracts. In both cases the contracts are signed before the start of the growing season),
- the free market, allowing transactions between farmers, merchants and processors during a season with immediate delivery (within 10 days) or with later delivery (weeks or months later). These transactions are made during a season, when yield and quality is known.
A well functioning market requires the necessary transparency; that is why there are various quotations in Europe that show the latest developments on the free market with immediate delivery.
The weekly Belgapom quotation is one of them. Every Friday morning, based on the figures from traders and processors who buy and sell batches of potatoes daily, Belgapom records the most commonly used price for early potatoes (if applicable) and Fontane on the day before the quotation. This quotation also includes an additional market mood and in this way offers both buyer and seller an instrument to better interpret the free potato market.
In fact virtually all the growers, dealers and processors are active on the market both using contracts and on the free market.
In the past few years, the share of contract production has increased sharply. After all, operators throughout the entire potato chain wish to increase certainty. The prices on the free market - in contrast to those for the contracts– are extremely volatile as a result of the acreage, the weather conditions, that determine not only the production and harvest but also the storage of the potatoes, and of course the market conditions. Offer and demand influence the Belgian and European market.
The smaller the free market becomes, the more volatile it will evolve, which is also illustrated by the multi-year graphs of the various quotations.
To get a correct picture of the evolution of the price of raw materials for the Belgian potato processing industry it is important to take into account both components of the potato market: contracts and free prices.
The ratio between the two factors may vary from one company to the next.
That is why, starting from 2014, the weekly Belgapom quotation will show not only the evolution of the weekly quotation for free early potatoes (July and August) and potatoes of the Fontane variety (September to end of June of the following year), but also a graph of the average monthly contract prices for trade and processing (if available).
In this way it possible to gain clearer insight into the factors that affect the price of potatoes for the Belgian frozen fries industry.
