Drought sets potato market on fire

The market got off to a good start on Monday, June 12, but due to the persistent dry weather forecast, it was stepped up a notch on Tuesday, June 13.

Question from Belgium and France
Demand seems to come mainly from Belgium and France at the moment. Concerns increase with the lack of rain. The potato growers have contracted a relatively large number of potatoes and, with the past season in mind, are quickly concerned about not being able to meet the contract obligations. Therefore, where it is possible to irrigate, the installations run day and night in the hope of keeping the potato plants up and running.

It is striking that the price of the old harvest of potatoes does not respond much to the current situation (with regard to the new harvest). Demand is too limited, while early pricing remains extremely calm. Apparently, the processing industry does not yet want to and does not need to switch to close possible shortages in the event of a persistent drought. 

Rise is too early
The increase is very early in the season and often a market reacts too quickly and too violently. A striking comparison is the movement that the futures market made from the 2005 harvest. Even then, the market quickly rose in the same period, only to fall again quickly after a few days (due to unexpected rain).

In other important parts of northwestern European potato growing areas, nothing is wrong. These growers therefore use the high prices to take extra cover on their potatoes. These are well above the contract prices and are expected to give a good return on cultivation with a normal harvest.