April contract settles at highest point

On Thursday, April 26, it was last possible to trade on April 2018 old harvest (2017). The outstanding contracts (a record number of almost 5.500) will be settled at the Cash Settlement of €5,80, as announced by the EEX.

The settlement of the quotation takes place at the highest level of the Cash Settlement to date this season. The first Cash Settlement of this season was set at €3,90, the (in retrospect) darkest point of the potato market.

Abundant harvest
All possible means to get through the abundant European potato harvest were used (such as sales to starch industries), so that after a long period that lasted until March, the potato market slowly recovered. The last Cash Settlement of March was (at €4,50) €0,40 higher than the previous week. After that time, the increases in the Cash Settlement continued, with the highest quotation to date being €5,80 on Thursday, April 26. 

The Cash Settlement is, as is known, created through input from Belgium, France, the Netherlands and Germany. It is striking that the high contribution in recent weeks came from Germany. While the average contribution from Belgium and France on Thursday, April 26, did not exceed an average of €4,37, more than €7,50 was contributed from Germany.

Innovator considerably more expensive
According to various sources, €10 per 100 kilos was paid in the German market for free Innovator in week 17, while in Belgium people turned their noses up at Bintje. On April 27, Belgapom put no more than €2 per 100 kilos on Bintje's plate. The difference in market price between the two varieties is enormous and indicates in which 'phase' the Bintje variety has ended up in the potato market in 2018/2019.

No race yet in June
With 5 more Cash Settlements to go and the June 2018 contract (settlement already on June 1), it will also go down in history. On Friday April 27, trading for the June quotation was around €7,70, a difference of €2 compared to the most current Cash Settlement. The physical market should rise further in the coming weeks and with it the various quotes used for the Cash Settlement. Certainly not an insurmountable step in a volatile market when it comes to free potatoes.

On the other hand, there are also signals that supply will increase in mid-May, putting pressure on the market. The question for the coming weeks is: can the upward trend of the past month be maintained, or will the market fizzle out? Time will tell us that.  The Cash Settlement per crop year (2014, 2015, 2016 and 2017).