The physical potato market did not really want to go smoothly last week. The processing industry is not in the market for direct supply, a mismatch that is very unfortunate. Potato owners have been waiting for a few weeks to sell in the hope that the market will continue to rally.
Many growers have gambled on a €20 market. In addition, the PotatoNL listing has also sent the wrong signal to growers. Marking the top firmly gave the impression that potatoes were worth €15 plus, but the reality was that only a few very special potato lots had been paid for. And that the demand from the processing industry was in fact only there for Fontane. Varieties such as Challenger and Innovator have no destination during this period.
By postponing sales, batches of potatoes are now coming onto the market that actually have to be sold due to quality issues. Sprouting and the decline in baking quality are the most important drivers. To speak in sports terms: the market peaked too early.
Is it over for this season?
That remains to be seen. There appears to be no light at the end of the tunnel for the next 14 days and the market is driven by compelling supply. For the subsequent period (from week 26 to 27), it will become clear how the early potatoes have developed and how they fit in with the new season. Has the growth retardation been sufficiently reduced and how many old potatoes are still available?
Early potato growers from the field report that it will be quite a challenge to have the potatoes ready on time. The past warm week has also ensured that growth is not optimal. Another underexposed point is that the area of early potatoes has shrunk significantly in Germany, but especially in Belgium. So if growers there start the harvest too early and the yields are disappointing, there will be a gap in the market afterwards. The tension between sufficient or insufficient is therefore mainly in the period weeks 28 to 32.
Demand is increasing
Another factor that plays a role is that the relaxation of the corona measures has created an explosion in demand for pre-baked products. Everything coincides, the opening of the catering industry, the start of the various events (European Football Championship, Olympic Games, festivals, etc.). This leads to records in the sales of fries in the world.
Everyone is operating at maximum capacity in both export and domestic sales. That is why the stocks that have been created in recent times are also shrinking rapidly (read: demand is greater than supply). If the industry cannot afford something, it will be at a standstill due to a lack of (new) potatoes during the transition.