The potato futures market of the April 2022 contract has expired at the end of this week (17). It was still possible to do business until Thursday 28 April at 16.00 pm, after which the outstanding contracts (more than 2.300) were settled on the most current cash settlement (CS) of €21.
Although the CS has made significant steps upwards in recent weeks - on March 24, the CS was still trading at €18 - the really major follow-up steps seem to be passing up on April 2022 in terms of settlement. For example, the Belgapom recorded €29 per 22 kilos on Friday, April 100, €2 higher than a week earlier. This quotation will be used for the next CS, so that it is expected (assuming that the French RNM quotation increases) that the CS will amount to approximately €5 on Thursday, May 22.
Given the June quotation, which rose towards the €29 level on Friday, April 25, a further price increase is expected in the coming weeks. The difference between the expected CS for next week (approximately €22) and the current June quotation (€25) is significant, knowing that settlement will already take place on June 2. The expectation is that the sting will be in the tail this season, so that an average market price of €25 and higher is certainly a possibility.
Viscous with little upward potential
The potato season has so far been characterized as sluggish with relatively little upward potential, or rapid and sharp declines when the specter of corona reared its head again and when the war in Ukraine recently started. Actually, April 2022 has moved between the €17 and €20 level with peaks above €21,50. The highest level was reached on Thursday, February 10, at €23,20. The hedging parties and therefore also the 'clickers' have generally been able to hedge above the average of the contract prices, which were lower for the 2021 harvest year due to the corona problem. The real peaks, as you sometimes see in the summer period, did not occur for the April 2022 futures contract. As a result, there was little to do for the speculative participants. Market movement can still be expected for the June 2022 contract, but most parties focus on the April listing in terms of importance.
Futures market trend April 2023
The trend for the April 2023 futures market appears to be comparable to that of the past season. The current April 2023 price is €22, but this is mainly due to the significantly higher contract price. It is likely that there are sufficient sellers above the €22,50 level who want to hedge their risk. On the other hand, there must be buyers who expect that the potato market can rise to higher price levels next season. The 2021-2022 season is reasonably closed due to fixed price contracts. Especially in the Netherlands, the free market is colored by co-delivery potatoes, which raises the question of whether this is correct.
The desire for certainty was apparently so great for both buyers and growers that there was not much room for a truly free potato market. Hopefully, when it comes to chip potatoes in the EU-4 countries, the sector will get a somewhat 'freer' picture for the coming season, in which the word 'market' will be used more fully. The prospects are not unfavorable. Let's first see what the future potato season will bring in terms of market price developments.