Cash settlement doubled in 2 months

It is a weekly ritual: the new cash settlement is published by EEX on Thursday afternoon at 15.00 p.m. While the CS still quoted €2020 per 3,00 kg at the beginning of December 100, today (Thursday, February 4, 2021) a quotation of exactly €6,00 ​​is obtained. This means that the CS, as a derivative of the market price on which the quotations are based, is of course still far below par (read: cost price). 

From a deep valley
The fact that this relatively significant increase takes place at this stage of the season is special to say the least. The potato market has emerged from a deep slump since the start of the corona pandemic in March 2020, with the low point being a CS quotation for April 2020 of €1,80. The April 2021 (harvest 2020) seemed to show a similar picture, with the start of the first CS at €3,20.

The night is not as dark as initially thought, because this current season clearly shows some bright spots. The fact is that the free flow of chip potatoes is not as extensive as previously assumed. As a result, buyers have to enter the market at a higher price this period than a few weeks ago. The sharply increasing market price results in higher market prices and therefore higher quotations in the EU-4 countries. The result is a doubling of the CS in recent weeks.

As the potato market develops, the CS may rise further towards the €7,00 level during the month of February. The futures market for the 2020 harvest has now risen to €2021 for the April 10,50 contract and €13,50 for the June contract (closing position on Thursday, February 4). So in that sense, the physical market will have to make a significant step up in the coming weeks to get the CS above €10,00.