Potato market sinks into a swamp of uncertainty

Last week the futures market closed at €15,50, only to drop back to €13 last week. The physical market has been quiet in recent weeks, but has held up reasonably well. This is also clearly visible in the PAT index, which shows a stable line.

The processors quietly buy more, but only from their regular growers. Free growers notice that there is little interest from the market. And despite the prices circulating on the various lists, it is difficult to sell potatoes for that price.

Lower Belgapom inevitable
The reduction of Belgapom (where there are more free potatoes) therefore seemed inevitable. Belgapom lowered the prices for Fontane to €13 on Friday morning, Bintje dropped back to €12,50. This then causes a sell-off on the futures market and also reduced buying interest. Liquidations of positions also put additional pressure on the futures market.

Moreover, the potato market does not remain free from the coronavirus. Belgian processors in particular are concerned about their sales. Belgium is the largest supplier of pre-fried fries in Asia and Belgians are slowly starting to notice that demand is coming to a standstill. The main reason is that the availability of logistics resources is becoming increasingly limited to be able to sell the end product.

No containers
Reefer containers are practically no longer available and as a result many exports are stagnating. The problem with the containers is also putting pressure on other parts of the world to which exports should have been made. It remains to be seen whether there will be a total standstill.

In the short term, everyone will continue to operate, but if it really piles up and the cold stores become full, the processing of potatoes may have to take a big step back. When calling the various processors, the concern is clearly heard.