Bizarre development on the potato market

Where at the first final cash settlement (CS) for the April 2022 contract, the day after it was announced (that was €21), the physical market jumped up and showed a strong move upwards to €25, it is with the final CS of the June forward contract exactly the other way around. The final CS of the June 2022 contract came in at €24,80. Due to Ascension Day, the last Belgapom listing that participated for the final CS of the June contract was already recorded on Wednesday 25 May, eight days before the last CS was put together! At the time, this was still €25, while the first cracks in the physical market were already visible.

Actual market
And today the Belgapom quotation also showed what the actual daily market for potatoes suitable for chips is looking like. There was in fact… no listing, due to lack of transactions. A picture that was also clearly noticeable this week because there is no demand at all from the Belgian, Dutch, German and French potato processors. This gives owners of free potatoes an uncanny feeling about the market. It is indicated at all counters in the market that people are not a buyer of potatoes. Processors indicate that they have completed their business, which means that they are not on the market.

Incidentally, the processors do buy the co-delivery kilos and pay them neatly on stock exchange quotations. Thus, the PAT list gives the impression that the market is still moving around and below $25. However, this only applies to growers who have a contract and who supply the excess kilos.

Weird phenomenon
There is currently no bid on the supply from free growers and the trade. A strange sensation when there is an offer for €20 without a processor, from anywhere showing interest in it and then potatoes supplied with it are settled at €24. The processors seem to be ignoring the really free potatoes for the time being. These potatoes are insurance for the production without having to or wanting to pay a storage premium for them at the moment.

Due to the ever further erosion of the potato market, the motto seems to be to dance when there is music, but as soon as the music stops, stay off the dance floor for a while, waiting for the music to sound again.

Belgians determine the game
It is also striking that the Dutch processors have completely lost control of the market to the Belgian processors. Where in the past everyone looked at what the Dutch market was doing, it has now become the next on the Belgian market and the Belgian processors are pulling the strings.

The big question is how the market will move in the coming weeks. Will the question come back again? And at what level? Logically, you would think that demand would arise again around €20. This has to do with the price of the early potatoes. If the old harvest is cheaper than the early of the new harvest, processors always tend to continue with the old harvest a little longer. But for now we are looking for a buyer, also at €20. It remains strange that two weeks ago people wanted to buy for €25 plus and now for €20 euros indicate that they are not interested. A shower with growing weather can quickly change the mood.{{dataviewSnapshot(2_1654257470)}}