The downward trend in the export market appears to be continuing. Supply of the last early potatoes in particular puts extra pressure on the market. Despite the high rate of processing, there are growers who would like to clear their land for a variety of reasons.
A second crop, spreading manure before the end date or spreading work are important reasons to continue working with field potatoes at lower prices. For the time being, there appears to be no price recovery on the horizon. In the Netherlands the pressure seems lower than in Belgium. As a result, prices in the Netherlands are still somewhat higher. Prices between €13 and €16 per 100 kilos have been achieved in the Netherlands and between €12 and €14 per 100 kilos in Belgium.
Quality and logistics
Furthermore, two other things play a role in the potato market: quality and logistics. Rejections of potatoes have increased sharply in recent weeks. Culprits are mainly wet rot, underwater weight and hollow.
People in the field therefore express their concerns about the quality and its short-term storage. Especially in the south, Belgium and France, a lot of hollowness is found, especially in the Fontane, Agria or related varieties. It is said that 10 to 15% of the breeds mentioned are affected by this. Storage becomes a significant challenge, which can ensure a constant compelling supply at the beginning of the season.
Innovator at the bottom of the yield curve
Challenger seems to be the big winner this year with good quality and kilos. This is apparently a good growing season for Challenger. In terms of kilos, Innovator is the worst boy in the class and seems to be at the bottom of the yield curve due to relatively low numbers and a less than ideal growing season for this variety.
The other problem is the lack of sufficient transport capacity to transport the potatoes off-shore in a short time. Everything that can drive drives, but this does not seem to be enough for now. Something that makes field suppliers nervous, because they want to continue completing the field harvest.
Between hope and fear
The futures market now seems to be in a bit of no man's land. The quotation is too low to sell or hedge and too high to provide sufficient profit potential. This leads to limited turnovers and movements. Turnovers are extremely low for the time of year (just before the main harvest) and the open position has also barely grown in recent weeks.
Everyone is waiting for the final kilos and quality before the participants start moving again. In addition, the fear of a third or fourth lockdown continues to keep speculators off the market. With the Delta variant, fear remains and developments such as in Japan ensure that people remain cautious.
Based on the first harvest forecasts from DCA and Weuthen, a market between €17 and €21 seems realistic, but participants in the futures market remain cautious. Processors can also partly find their cover on the physical market, but they do not want a large excess cover if sales fall again by 30 to 40% due to further lockdowns.{{dataviewSnapshot(2_1630064799)}}