It is difficult to do business if you do not know where you stand. That is exactly what is going on in the potato market. The growers and the processing industry are both in uncertainty. What causes this uncertainty is completely different for the market parties.
The grower is mainly affected by the drought. The trial harvests have so far shown very decent yields. Due to the lack of precipitation and - more importantly - the high temperatures, growth is going well at the moment. The relatively high underwater weights are a sign that the crop has already fully matured. Rain is expected early next week, but many growers do not have high expectations.
If significant rainfall does occur, overwash could become a serious problem. For the MH to work properly, growing weather is necessary. There was certainly not much of that in July. Some growers, hoping for better conditions, have passed up the opportunity for MH spraying. Others did spray, but saw the foliage turning green again after a few days. There it is doubtful whether the MH has been properly absorbed.
Costs and sales
The industry is much less concerned with the quantity of potatoes, insiders hint. The high production costs are a much greater concern for processors. Sales must remain intact and the European industry should not price itself out of the world market, or so the idea is. The problems on the European gas market add an extra dimension to this. Until six months ago, cutting off energy to certain sectors was considered impossible. Now this is being discussed openly. That certainly does not mean that this will actually happen, but just putting the option on the table makes some parties nervous.
The fact that growers and processors view the market completely differently is perhaps the best explanation for what is happening on the futures market. Last week the tension increased and it seemed only a matter of time before the €30 mark would be passed. This week the price suddenly dropped again to €25,50 on Thursday, August 11. The price on the futures market is therefore incompatible with what is happening on the physical market. PotatoNL recorded between €20 and €25 per 100 kilos this week and Belgapom is today (Friday) at €25 with the mood stable (supply and demand in balance). This effectively means that there is little or no premium for storing the potatoes until April.