Never before have so many hectares of early potatoes been harvested and processed into French fries products in such a short period of time in such a short period of time. The steam comes off almost literally, to put it popularly.
All parties such as processors, trading houses and growers report that the harvest of early potatoes is going at a breakneck pace. A striking and favorable development for the market, which ensures that the fear of a plug in the supply of potatoes appears to be less than expected. There was a great fear of a build-up due to the late start of the early potato harvest season. Due to the postponement of the harvest by 3 to 4 weeks due to the cold spring, the processors had to catch up based on the contract obligations.
At a relatively low processing speed, this could lead to additional pressure on the market for later (subsequent) potatoes. That doesn't seem to be the case. Due to the good sales of fries, the enormous processing capacity and the large harvesting capacity of modern harvesters, a huge amount of potatoes are processed in a short time. Last week there was even a shortage of logistics capacity to meet the demand from processors.
First fulfill the contracts
The boost in the harvest and processing of potatoes has not been reflected in the physical market in the last few weeks. The large volume of contract potatoes that have been delivered leaves little room for processors for free potatoes. This has created a market where the prevailing feeling is that there is no demand, which is reflected in the pressure on quotations (Belgapom back to €20 on Friday, August 14,00, a decrease of €1,00). Moreover, the potatoes for the main harvest are growing well, which makes growers a bit nervous about current market price developments. The industry's 'sitting back' actually causes slightly more supply
Potato.nl continued the trend this week (33) by including € 13 for Fontane ex field in the quotation. This would be a transaction for delivery within 4 weeks. This has put the potato market on the wrong track, as potato delivery in 4 weeks is a different 'story' than, for example, Zorba for direct delivery. A rather disturbing gap within the regulations of Potato.nl with consequences for the vote this week and therefore the price development.
Growing weather
The current growing conditions - without paying too much attention to the actual expected harvest per hectare - are good. Varieties such as Fontane and Challenger in particular are making up for some of the growth lag, which in turn gives processors confidence. On the other hand, there are reports of quality problems, holes, growth cracks, rot and phytophthora. The quality problem is actually expected to result in more supply in the coming weeks.
In the case of the Innovator variety, a different approach must be taken. The crop wears out hard and due to the low number the average harvest will be below the multi-year average. Furthermore, the area of Innovator has shrunk relatively faster than that of the other varieties. Scarcity of this variety desired for fast food seems to be becoming real.
The futures market for the April 2022 contract is also struggling to maintain the price level of €18,50. With the physical market under pressure, a €20 term does not seem to be an option at the moment. At the end of the week the market dropped to € 17,50 with still little turnover. It now appears that the futures market will follow the physical market. In other words: first complete the field period in the next 2 months, and then take stock from that point and start the rest of the (storage season).