The current situation in the Northwest European potato market shows a recognizable pattern as the month of February continues. That starts first, as we've seen in recent weeks, releasing the 'pink balloon'. Mainly on the initiative of Belgium and France, the upward trend is steadily being continued to reach €30 per 100 kilos in the last few weeks.
From the start with potatoes from the shed, after a few months we have arrived at €30 per 100 kilos for Fontane, the largest chip variety at the moment. Innovator generally pays a little more. Now that the potato market has reached around the €30 level, people are already looking ahead again. Is a further increase to, for example, €32,50 or €35 possible? Looking at the price movements on the onion market, this is in principle possible, with the caveat that the potato market is not the onion market. The number of parties in the potato market is limited and buyers know that if the market is raised, the volume of potatoes to be purchased will not increase.
Customers determine the max
The premium for April-May delivery, for example, compared to the daily price is minimal, up to bids of, for example, €32 per 100 kilos for Marquis delivery in mid-May. The long-term storer is therefore not enthusiastic about offering his potatoes today for delivery in April or May at prices that are not much higher than the current daily price. Basically, it means that buyers do not want to pay much more than €30 per 100 kilos, even if the potatoes have to be stored for a while. The storage premium appears to be the maximum, but an additional premium containing expectations is rarely given, if at all.
The fact that buyers are somewhat reluctant to offer significantly more for later delivery at the current price level is the buyer's right choice. Let the season continue and we will see which way the potatoes (read: price) roll. The fact is (back to the recognizable pattern) that if the market tends to cool down a bit, looking at the futures market with a closing position on Friday February 10 at €29,50, the offer for later delivery may be released a little more easily. No grower wants to miss the boat, even though he may have to keep looking after the potatoes until April or even May.