While significant steps have been taken in the potato market in recent weeks, it now seems to be taking a step back. This morning Belgapom was trading at €25 stating that it is a stable market. The market feels balanced and would need new impulses to take the next step. These impulses are currently lacking.
The major steps that the market has made in recent weeks were mainly due to a lack of supply. Especially in Belgium it was disappointing how many potatoes could be bought at €20 and €22. Growers held on and the purchasing parties had to take another step to get their hands on the potatoes. Now that the market is at €25, Belgian processors seem to be able to buy enough potatoes and the market has become balanced.
The Dutch market is only behind the Belgian market. Dutch processors are not active buyers in the market and appear to have their business better covered. The fact that they have to go along with the upward sentiment of the Belgian market only means that the delivered kilos are charged higher, but the processors are not very actively looking for free potatoes.
Market lingers
With the rapidly increasing market, exports also seem to be dropping off somewhat. With potatoes costing €25-plus, which then have to be packed and transported, they become very expensive potatoes. And that makes everyone a bit hesitant. The market will need new impetus to take the next step and this is not available at the moment. The futures market for the June quotation was therefore unable to maintain the increase and €27 appears to be the top of the market for the time being.
In part it all resembles a weather market. The ongoing drought is creating extra sentiment in the market, but now that they are forecasting rain for the end of next week, the market is also relaxing a little more. The connection with the early potatoes remains an important item, as it is every year. Reports about this vary. Some say that things are looking very good and others say that the cold period and the current drought are having an impact on the crop and its final yield.
In any case, the futures market for the new harvest had to give up, with the announcement of possible rain. This quickly fell by €1,50 from its high of €23,70 to €22 today. Still a record price for the time of year, but the growing season is still long.{{dataviewSnapshot(2_1652432717)}}