Inside: Potato Market
Sales of the last potatoes remains a difficult process
Even after the settlement of the term of the April 2018 contracts, the physical market does not seem to want to rise any further. Many growers had some hope of a somewhat improving demand from the export and French fries processing sector. This expectation was prompted by the later spring.
Would you like to continue reading this article?
Become a subscriber and get instant access
Choose the subscription that suits youTraditionally, a later spring gives mood, and a therefore higher market price. However, the comparison with the 2014/2015 season is not valid for the time being. At that time, market prices were also deplorable, but at the end of the season (mid-June) the market rose above the €10 level; especially the free potato growers still have this scenario in mind.
Too large volume
However, there is too much volume this season, making price recovery difficult. A lot of work has been done in recent months regarding disposal to 'other' destinations, such as starch and animal feed. This, in combination with the high processing speed and good export sales, has not yet ensured that prices could rise again towards acceptable levels (above cost price).
Even today, supply seems to be greater than demand. Many potatoes are stored in storage without mechanical cooling. The potato processors seem to have their affairs in good order and rarely or never report to the market. Shifting contracts and switching production schedules means people are taking a wait-and-see attitude.
Revival not correct
The rebound shown by the June futures contract (to €15 in week 10) appears in retrospect to be a false move. The mood of later spring, which would have caused the demand for old potatoes to last longer, was ultimately not translated into the physical market.
In fact, the picture is unambiguous throughout the season: supply of parties that are mediocre in terms of quality. Prices differ considerably this season (based on the varieties). Good quality Innovator is still reasonably priced at just under €7 per 100 kilol, for Fontane (for which there is continued interest from Belgium) the maximum is €6. It is more difficult to find buyers for Challenger and Bintje.
With a period with warm days in the near future, the supply will dominate for the time being. According to insiders, things will only get exciting from (at the earliest) week 25. How well have the early potatoes developed, and how much usable material is still available? Those will be the remaining questions.
The June contract on the potato futures market is not showing any recovery.