The potato market has turned like a leaf on a tree in the past week. Russia's invasion of Ukraine caused and is causing a lot of unrest in the world, which also had a strong effect on the potato market.
While the futures market for the April 2022 contract was still trading at €23 in mid-February, by mid-March the market had fallen back to €17 per 100 kilos. Almost in unison, buyers reported that sufficient potatoes were available from the agreements already made until May and that little upward potential could therefore be expected for the time being, while PCA/Fiwap in its publication on Tuesday stated 'permanently' that a clearly different gave a signal.
It now appears that the dip in recent weeks was not really necessary, but it did put the market parties on the wrong track. Growers in the Netherlands who offered Fontane at €19 at the end of last week, for example, had to make do with a bid of €18 to €18,50, as Belgapom quoted €17,50 per 100 kilos. PotatoNL Cat1 also sold at the bottom of the price range (read: Fontane) at only €18 per 100 kilos. Today (Friday, April 8), €20 has been offered for Fontane without any problems and even €21 has been paid for direct delivery, which is reflected in the current PAT overview. The Belgapom listing also made a significant jump by rising by 12,5% to €20 for both Fontane and Challenger, partly due to the fact that various buyers outside the processors are entering the Belgian market to buy Fontane in particular, which ultimately were not for sale for less than €20.
Special situation
The significant recovery of the market in the first full week of April is quite special. In previous years, the market ebbed and flowed towards the end of the term of the April futures market quotation or week 17 of the season. After all, many potatoes had to be paid for, for example through cash settlement or PotatoNL listing. The settlement for the 2021 harvest would not be much different given the mood at the end of March, which is strange since an average market price of say €20 in week 17 is not that bad to say the least and does not really motivate the European grower to to continue growing potatoes (look at the wheat price for the 2022/2023 season), while that is precisely what the processors want to prevent. In this sense, the futures market for April 2023 is indicative with a current quotation at €22. Why should the futures market settle old harvest much lower?{{dataviewSnapshot(2_1649427506)}}
The latter (settling much lower than €22) now seems to be virtually no longer an issue. Due to the significantly higher quotations, the cash settlement for next week could easily rise by €2 and reach the €21 level. The question is whether the market can rise further towards week 17. In any case, transactions are reported for Fontane up to €21 and the market price of fries-suitable Agria also increases from €24,50 delivery week 15 to €25,50 per 100 kilos week 21. Up to €27 is currently being paid for export-suitable Agria. It must be said that the interest of processors in Innovator is somewhat less. This may improve if varieties such as Challenger and Fontane remain priced at competitive prices. {{dataviewSnapshot(2_1649427584)}}