Inside: Potato Market
Market is alive after deep hibernation
This week, after a long time, the market for potatoes came back to life. Until now, a lack of demand has put the market in a deep hibernation. The failure of Belgapom to record in particular was indicative of this.
Would you like to continue reading this article?
Become a subscriber and get instant access
Choose the subscription that suits youLast week, Belgapom recorded for the first time since potatoes were recorded dry from the shed this season, and this week Belgapom also recorded a quotation. The market for Bintje in Belgium remains very weak, with still a lot of supply and a weak mood. The Fontane market appears to be showing tentative signs of recovery, rising from €0,50 to €3.
More scope in delivery obligations
The slightly more lively market is due to more scope in the delivery obligations. They are now no longer bothered by a compelling offer and the residual lots that were not purchased during the off-shore period.
Processors appear to prefer to purchase additional supplies for short-term delivery. In addition, it seems that they want to push back the good quality contract potatoes in order to complete the coverage before the end of the season.
Rising euro
Exports have been going well so far. However, whether the rising euro will throw a spanner in the works will only become clear in the coming weeks. There seems to be no problem with the sales of fries. Demand is good and prices are minimally competitive. The futures market is climbing to its highest point in the past 2 months.
At €5,70 this amounts to the daily price and the Cash Settlement. The Cash Settlement dropped to €3,70 this week, a dime lower than in week 3. This brings the premium to €2, with 12 weeks to go that is a custody fee of €0,16 per week.
New sellers are difficult to find on the futures market. Hedgers see little downside risk at this level and a number of trading houses are also offering prices similar to the futures market for April/May delivery.
Physical market decides
Whether the revival is definitive will depend on the subsequent demand in the physical market. Ultimately, processors will have to show purchasing interest to further lift the market. Given the coverage of these parties, they will be able to survive for a long time, so as not to create demand on the market.
The comparison between the Cash Settlement and the potato futures market.Would you like to see more graphs, then visit the database.