Futures market falls further due to Belgian listing

Even today, Wednesday August 16, there was no stopping the futures market. With a lot of turnover (436 contracts), the market fell further to the lowest point of the year, namely €8,30. Confidence in the market does not seem to be high, despite the turbulent start to the year. Growers fear a repeat of 2014 and sell on the futures market to cover their available potatoes.

Sentiment is getting worse by the day, mainly due to the development of the physical market. With a PCA (Belgian ex-land quotation) of €5 to €6, the futures market was dealt a final blow today and fell even further.

Belgium
Belgian processors are not active in the market, despite the poor to moderate yield of early potatoes. During the transition from the old to the new season, the processors have been able to avoid early potatoes for 3 weeks (this concerns old harvest and downtime). This means that all contract obligations for that period have also been postponed.

Growers who had contracts for delivery in the first week of August are now being told that they can only deliver in the last week of August. This is disastrous for the development of the off-shore market. This is because the potatoes that were planned for the last week of August are now not meeting demand in the physical market. This appears to be causing the market to bulldoze considerably.

There is now also a supply of non-current varieties. Due to the scarcity of seed potatoes last season, all kinds of unknown varieties were planted in the hope that there would be a high demand for 'free' potatoes. However, these seem to be an obstacle to healthy pricing of the regular varieties.

The weather conditions
The bad weather isn't helping either. Growers and traders describe this type of weather as 'real potato weather', which means that the plots are experiencing good growth. Of course, it remains to be seen whether the race is over for this year.

The potatoes from the main harvest still have at least 4 weeks of growth left and the harvest is not yet behind the shelves. In addition, a number of areas in Europe appear to be significantly affected by weather extremes, for example Austria, parts of Germany, parts of Belgium, parts of France, Italy and countries in Eastern Europe. Export opportunities may arise from this.

Spraying potatoes to death
Due to the negative mood in the market, seed potato growers appear to be opting en masse to spray their potatoes to death prematurely, so that everything falls in line. This in turn creates opportunities for consumption potatoes on the export market. In recent years, these have been filled with cheaper oversized seed potatoes.

However, if we compare the development of the futures market with other years, the 2011 movement is still most in sync with this year (and that is not a good omen).

The April contract of the potato futures market.