The cash settlement (CS), a derivative of the various potato quotations in Europe, is slowly starting to increase.
As usual, the Netherlands is the leader in terms of price level in the CS with a current value of €17,93 per 100 kilos. On average, the French and Belgians do not exceed €15,50 per 100 kilos for the input of CS, which is almost €2,50 lower than what is served in the Netherlands. Germany is in between for the CS with an average for the CS of €15,61. The fact that the Dutch contribution is (also relatively speaking) considerably higher than the contribution from Belgium and France in particular is due to the method of recording (category 1 and 2) and the varieties that are contributed. In Belgium and France, this only concerns Fontane and Challenger, which generally determine the bottom end of the market and are usually only used for French fries processing. In the Netherlands, but also Germany, part of the input is determined by varieties such as Innovator and Agria, for which more is paid on average.
Futures market is rising
The current forward quote of the April 2022 contract has jumped in recent days from €20,50 at the start of week 2 to a closing position of €21,50 on Thursday, January 13. The margin between the futures market quotation is €5,40 (€21,50 - €16,10). Ultimately, this price difference can easily be bridged, especially now that the market has started to move so quickly after the New Year. The time to the last week of April - when the futures contract expires - is still plenty and the tension in the market is palpable.
However, eyes will be focused on what will happen, especially in Belgium, with market prices and the quotations to be made on them. For example, will the step from the current €15 per 100 kilos for Fontane to €20 be made quickly? And if the step is going to be taken, when will that happen? And if €20 for Fontane and Challenger comes into the picture, is there more to come? Time will tell. Recent years have taught us that a price movement, especially to a higher level, never runs smoothly. However, this year more seems possible and perhaps in a less difficult way. The stocks of chip potatoes in Europe are not excessive and sales appear to be continuing well for the time being, which could increase the tension and thus market prices and ultimately quotations. An average market price between €20 and €25 should be fine, as evidenced by the current status of the April 2022 quotation.