The potato market is starting 2023 in a good mood. The futures market has found its way up and it seems only a matter of time before the physical market follows. The €30 is within reach and the market seems to be looking for a new top in the market.
The French fries market seems to be heading towards the €30 level. In any case, the first week of 2023 is off to a good start. The April 2023 contract on the futures market has a seasonal peak of €29,30 and quotations in various European countries are tending. On the physical market, insiders had expected a further step to €27,50 per 100 kilos from the Belgapom quotation for Fontane and Challenger this week, but that has not (yet) happened. On Friday, January 6, an unchanged quote (€25 for Fontane and Challenger and €27,50 for Innovator) was put on the board. The mood is described as undiminished fixed. This makes it likely that the next step to, for example, € 27,50 for Fontane and Challenger and € 30 for Innovator can be taken in the foreseeable future. The other quotations in the other EU-4 countries will then follow to a greater or lesser extent.
How far can the price rise?
The question that then arises is: how far can the market price rise and fall later in the storage season? To answer the last question, the answer is yes. A market price can, of course, also drop again if, for example, sales of chips temper somewhat, which is not expected. Another possibility is that the market price is inflated to such an extent without being able to buy much more volume of potatoes. The fact is that many potatoes already have a final destination and there is little left to trade freely. The question then remains how far can a market price of French fries potatoes rise in 2023 in the event of scarcity?
Only recently (read: the past ten years) a market price with a good year (year with a positive story in terms of availability versus sales) had a top of around the €25 level. However, the €30& level was the absolute top. For example, in the extremely dry 2018 harvest year, the April 2019 forward contract settled at just under €28. Also in that season, the market rose to almost €2019 (week 33) in the first weeks of 6, but was unable to maintain that price level. For the 2022 harvest, it is a different era in terms of costs and inflation. Also looking at the price developments for the 2023/24 season, a settlement in week 17 above the €30 level is not impossible. Where the top will be (€ 35,00?), must be determined in the coming months. Incidentally, an unexpected drop such as in the spring of 2019 can never be ruled out.