With the release of the first Cash Settlement, there is again a weekly indicator for the price formation of European potatoes. What effects does that have?
The first listing of the Cash Settlement is a special step every year. As is known, it can be assumed that the Cash Settlement contains not only the contracts settled (November 2017, April 2018 and June 2018), which can be traded on the futures market, but also physical potato contracts. The weekly impact is therefore great.
No physical trading
The Cash Settlement is compiled weekly by the European Energy Exchange (EEX) based on physical potato quotations. The first Cash Settlement this season amounts to €3,90 and is therefore in stark contrast to last season (€21).
This season's stories regarding the situation on the European potato market are well known and leave deep scars in the trade of physical potatoes. So there is virtually no physical trade. The search is on for parties that can place potatoes at all.
The odds
In Germany, potatoes suitable for fries are priced at €3,76, in France at €3,55, in Belgium at €3,68 and in the Netherlands at €4,75. This puts the Netherlands head and shoulders above the other countries, which are much closer to each other in terms of input. In the Netherlands, the new PotatoNL listing forms the basis for the weekly contribution.