With July approaching, the potato pools for chips potatoes are taking stock. What will the result for harvest year 2020 be? Despite a few rebounds, the potato market has also seen many lows. Looking at the different sales methodologies, they cut it down considerably.
The success of a sales methodology in the potato world is mainly determined by 1 factor. Is the weight before or after January 1? That is why the differences per season can be large. Selling early – before the new year – had a more positive outcome last season than waiting a long time. At least that is the conclusion regarding the 'flattened' averages.
Five methods
Traditional we compare the different sales methods before the pool prices are announced. These are the DCA PAT Index, based on the prices that processors themselves quote, the DCA Potato Bingo, category I listing of PotatoNL, the price of the April contract and the cash settlement. We take the average over the entire period during which the 2020 potato harvest could be sold. For the PAT Index and PotatoNL listing, this means that prices up to and including the end of June are included. The tail end of the season is therefore not included in this average.
The average sales price of French fries potatoes for the 2020 harvest year is €6,58 per 100 kilos. A year earlier that was still €12,84. If we compare the 2019 harvest year with last year, many similarities can be drawn. Once again, the cash settlement scores the worst, followed by the PAT Index. It is a sad result in an extremely lean market. What conclusion can we draw from these figures? The results of the pools are likely to range between €6 and €7 per 100 kilos. This depends on the positions taken and to what extent exports (category II) have provided 'golden crumbs' that can boost the balance.
Peaks
The individual results of growers are hopefully at a (much) higher level. In the spring of 2020, the price level on the potato futures market was between €10 and €12 per 100 kilos. After the new year, the price recovered again and narrowly managed to reach the price of €10,30 on February 8. At the end of February, the price again reached levels above €10 twice, before reaching a low of €6 on the last day of March.
Looking at the averages, these revivals are only slightly noticeable. Once again it is Potato Bingo - where the sales moments on the futures market are determined completely randomly and without emotion. This methodology amounts to €8,14, compared to €16,50 last year. Then the early prices were able to catch up with the high price level of early 2019. This was not the case this year. The April contract is number 2 with an average result of €7,82, followed by PotatoNL with €6,16.
Physical Market
Where the futures market went in waves, the physical market shows an upward movement in 2 steps. End of February and end of May. Both the PotatoNL listing and the PAT Index show this picture. Those who waited to sell could achieve prices around €12 or slightly higher at the end of this spring. Category II performed on a completely different level during that time. The price level there was €20 at the beginning of June, although the start of the season was also very poor.
The above figures about the average potato price of last season do not bode well for the pools. Hopefully the pool managers and companies have been able to utilize the few opportunities in the market and grab golden crumbs that were mainly there for category II. Both doing business early and waiting a long time have worked out somewhat well for the season.