The indekkers step on the brakes

In any case, it is clear that there is a loss of yield will be. Even though many growers can irrigate these days, at least 50% in Northwest Europe remains unirrigated. It is visible that many plots that have been irrigated (sometimes as much as 5 times) do not show the growth that they would show under normal weather conditions. The foliage is maintained, but the growth is minimal.

Structure in the market
​An important aspect in the price development of potatoes are the structures in the market. These structures have been in recent years changed greatly. From almost completely free cultivation to cultivation in which 75% of the processors' needs are recorded in advance through contracts. This has a huge impact on the market.

This also had a huge impact on the market last year, because the excess kilos (which had grown a lot due to the excellent growing season) could no longer find a place. The high coverage of the processors did not leave room for extra potatoes, which meant that many potatoes were produced alternative channels, including starch.

Cards are turned
However, today the cards have been turned 180 degrees. If the current drought continues the loss of yield be high. This can even cause growers to have problems meeting their contract obligations. However, it remains to be seen how the market will deal with this.

This also means that hedgers on the potato futures market are becoming more cautious. You can't sell anything what isn't there, so hedgers wait for their harvest. Growers expect a lot from the price on the open market. When the market price is high, coverage on the futures market no longer has any added value, because it involves a lot of liquidity for the participants. Despite the very high prices currently shown on the futures market, the hedger is very cautious.

What if it starts to rain?
Another big question (mainly of a cultivation technical nature) is: what happens if it does rain? In the past we have seen that (after a long period of drought and heat) the potatoes give a strong reaction (part of this is the regeneration of leaves and production focuses entirely on foliage).

Another risk is overwash. Not every breed is sensitive to it, but we know from the past that Bintje and Agria in particular can react strongly to this. How other varieties respond (after a record-long drought period) remains to be seen. Whatever happens in the coming month, the impact on the volume and quality of the harvest will be significant.The year 2018 is clearly going in a different direction compared to 2017.