Term is catching up due to demand from England

The futures market has been trading below the physical price and the cash settlement for a number of weeks, on Thursday March 23 it was 22,10 euros for the April 2017 contract. The most resistance can be seen in the French potato market. There, the quotations (RNM) have clearly fallen back in price in recent weeks. Bintje now quotes 22,50 euros per 100 kg and Fontane 23,50 euros. 

Expectation caused by fear
The negative expectation on the futures market is caused by the fear of a further fall in prices in the coming weeks. This is reinforced by the spring weather and the limited factor of buyers/processors. However, the further decline of the market seems to have stopped at the moment. Due to the very small volume of free potatoes, the supply, if demand arises, is very limited. Now that we are careful about what buyers inquire about potatoes, this will directly influence the mood in the market. 

First sounds of picking up demand
The first sounds of increasing demand emerged from Belgium at the beginning of this week, but Fontana and Agria also made this known. PCA/Fiwap also reported this week, Tuesday March 28, that prices are between 22,50 euros and 30,00 euros per 100 kg collected for Agria, Fontane and Markies with the final destination England and Spain. Buyers seem to want potatoes of above average quality. This immediately creates movement in the current “thin” market.

Buyers from England, but also from Switzerland, pay significantly more for good quality potatoes than regular buyers. The risk of rejection must be taken into account.

What is striking is the movement that the futures market is making compared to 2012. Then the market took off in week 13, this week, and then continued to rise (also due to English demand) to 27,00 euros. Whether this will happen again remains to be seen.