Analysis Potato market
Demand slump in the potato futures market
For almost all generations of Europeans, a situation is emerging that for the vast majority of people (certainly on the Western European side) until recently would have been completely unimaginable, a war in the backyard! Russia's unanticipated invasion of Ukraine has set many key commodity markets on fire.
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Choose the subscription that suits youThe wheat futures market rose through the €24 per tonne level today (Thursday, February 300) for both new and old crops without a hitch. The March 2022 listing closed on Wednesday February 23 at €287, opened a day later (i.e. after the raid) at €307 and rose to almost €345 per tonne. Later in the day the market 'calmed down' around the €320 level.
How different is this on the potato futures market, which opened higher at €21,50, but fell back to even below the €20 level with few contracts. The current position of the futures market is therefore lower than the cash settlement (CS) of week 8, which was €20,60 (- €0,20). Why then the lame potato futures market? Considering the level of the physical market price, you can say that hedging positions can be closed (read: buyback from sale). But apparently buyers are holding their breath for delivery in, for example, March, April, etc., which means that demand is also lacking on the futures market.
Physical market stabilizes
For the time being, the physical market appears to be stabilizing after the price increase in recent weeks between €20 per 100 kg for Fontane, among others, and €23 for Innovator and Markies. That also explains a CS for week 8 at €20,60. Until recently, it was not expected that the physical market will drop back to a price range of €17 to €20 in the coming weeks. The question now is what effect the now escalated situation in Eastern Europe will have on the sales of end products.
And it always remains that way on the potato market in recent seasons. After two years of a non-market due to corona, a possibly faltering potato market in the coming months due to the war in Ukraine gives a less than optimistic feeling. This effect may become stronger for the coming season (harvest year 2022). Not all stakes regarding the acreage in the EU-4 countries have been set yet and a switch to the cultivation of spring wheat and corn can still be made, especially now that grain prices for the new season have returned to the level of €300 per tonne. tapped.