What if we compare 2005, 2011, and 2017?

At the beginning of the week the market took off like a rocket. On Monday, June 19, the market rose to almost €21. The force and speed with which this happened is not unusual. This is because there was also an early peak in a number of previous years.

Strong 'move'
A late or extremely dry spring (May and especially June) often causes a speculative strong 'move', partly prompted by the limited supply of hedgers. Potato growers are generally quite reluctant to hedge in May and June. They are afraid of facing too much of a loss position. Especially when the market rises to, for example, €23,50. 

With the changing shape of the potato market, where more contracts are being contracted, too much coverage too early in the season is not useful. The growers do their first mating in the winter, by concluding contracts at a fixed price. With (price) coverage above 50%, the basic need for additional coverage is not immediately present.

Especially at this stage of the growing season, there is no information yet about the quantities that can ultimately be harvested. The volume that can be sold 'freely', to hedge on the futures market, is also still unknown. When it comes to the term of the past 2 weeks, it is the speculator's emotion that drives the market.

First weeks of July
The potato market only really takes direction from the first weeks of July. 'Potatoes make the pounds' is the old saying. Last year on June 23, the tsunami of water in West Brabant and parts of Belgium prompted higher prices. However, the potato price only made real progress when it became clear that it would remain dry in August and September. The last tons could not grow there. 

Striking heights
This early in the season with a futures market above €20 is somewhat striking. Especially when one bears in mind that the April 2017 listing settled at €22,30. And this with the knowledge that the hectare yield was the lowest in years. With an expansion of the European area, the move in recent weeks seems to have been a bit premature.

Looking at the database, then responds the futures market identical to that of 2005. However, it is also striking compared to the 2011 harvest. The question now is which exit will be taken this time; the one from 2005 or 2011?

View the database for all quotations.

The April contract on the potato futures market, per harvest year.