Trust comes on foot, but goes on horseback

The ingredients of the revival in recent weeks were clear. Moderate yields, difficult harvesting conditions and higher than expected processing of the Northern European chip factories. The futures market climbed to a top of €8,30 on Wednesday, October 7. Belgian industries in particular needed raw material security from storage. They therefore looked for potatoes through various channels for delivery in April, May and June 2021. These physical transactions kept pace with the futures market. Business was then done for €7, €7,50 and €8 delivery week 17 2021 suitable for fries.

But with the arrival of better harvest conditions, the potato market relaxed. The daily market stabilized at around €3 for the non-Bintje varieties. 

Second wave
Corona seems to be in its second battle. Infections continue to increase every day and countries are taking steps to curb the coronavirus outbreak. This makes it increasingly resemble the lockdown of March 2020.

European countries are imposing curfews, closing catering establishments and the green light for major events and festivals seems further away than ever. The sales of fries also notice this and the sales of fresh fries in particular are directly affected. Following this, there will also be a cooling down in sales of pre-baked products. Where at one point people were almost at 100% again, this is now dropping back towards 75%. Not nearly as dramatic as the first lockdown, but still disastrous for the volume of potatoes that Europe has grown.

Question from Asia
It should be noted that the only bright spot is the demand from Asia for fries. The coronavirus seems to be under control there and the economy is running at full speed again. Europe also benefits from America's limited harvest and can therefore do well in price terms in Oceania and Asia. However, this does not achieve the desired 100% processing, and there is still stock in the cold stores due to the longer processing of old harvest potatoes.

The futures market immediately shows this and fell last week with significant turnover to the lowest point of this season of €5,20. The previous down dated from week 30. Then the price settled at €5,40 on Thursday.

Demand from the physical market has also disappeared. People are still quoting €3, but selling for that is difficult. Forage traders are already reporting to the market, but the potato price will have to drop another €1 to be able to sell volumes. For the time being, the dark clouds will remain hanging over the market and a rapid recovery seems further away than ever.