The potato futures market is recovering strongly this week. While the market hit a low of €11 per 100 kilos last week, the EEX in Leipzig is now recovering. What is happening?
The ease with which the potato market is recovering is striking; especially considering the relatively low turnover. In the declining market, turnover was high, while the current upward movement feels thin. The recovery is mainly prompted by the persistent dry weather expected for the next 14 days.
As a result, subsequent growth may be disappointing, which may result in the harvest in Northwestern Europe being below the 5-year average. The growers report that Fontane has a growth spurt after the rain, becomes greener again and sometimes even blooms again. The dry areas also had rain last week. Not enough to solve the precipitation shortage, but the irrigated plots in particular benefit from the natural precipitation.
Small demand processors
The physical market does not yet seem to be in a positive mood due to the nice weather. The biggest problem lies in the very small demand for potatoes from processors. They have sufficient contract potatoes at their disposal and therefore do not enter the open market.
Supplied potatoes are charged at prices between €11 and €15, depending on the variety and size. Demand is also sparse in Belgium. Yet the physical market is active and the potatoes are traded for €10 off. A recovery is logical, but processors do not seem to be going along with it yet. Higher prices are also not offered for delivery in 2 or 3 weeks.