Potato prices on the physical market have been on the rise for some time now. Supply is particularly tight in Belgium and France and processors are straining their wallets to get their hands on the limited portion of free potatoes. Those high prices in the physical market are not in line with what is happening on the futures market and that creates a special situation.
The cash settlement for week 7 is approaching the €30 level, which is the highest point so far this season. With the exception of Germany at €27,40, the contribution is above a market price of €30. From the Netherlands it is €30,13, France €30,90 and Belgium €30,90. As has been the case all season, the German ranking for the CS is lagging behind. The mood in the north of Germany in particular is more moderate than the mood in Belgium and France due to the generally reasonable potato harvest. The latter was confirmed again this week by AMI. On a final total area in 2022 of 266.400 hectares, based on an average hectare yield of 40,1 tons, 10,7 million tons were harvested, 700.000 tons less than in the 2021 harvest year. In that season, the area was set at 258.300 hectares, of which an average of 43,8 .XNUMX tons were harvested.
For the vote in the EU-4 countries, the German state of Lower Saxony is by far the most important cultivation area, with an area of 2022 hectares in 121.200. The average harvest was certainly not bad, with an average of 43,6 tons per hectare (44,1 tons in 2021), which partly explains why German quotations lag behind those of the other EU-4 countries on average. Nowadays, sending potatoes from the north of Germany to a Belgian processor, for example, costs just €2,50 per tonne, which brings the price back to €30 per 100 kilos.
Mood levels off
By the way, the mood seems to level off somewhat halfway through the month of February. The failure to extend the futures market further is a good indication of this. The April 2023 quotation is currently around the €29,50 level and therefore lower (negative premium) than the CS €29,80, which means that the market feels somewhat negative towards April. In markets with relatively high price levels and that are cash settlement driven, some reluctance when it comes to impulses to higher prices is more common and the development of the physical market is followed more closely. In other words: the slight decline in the futures market is not yet a hard signal for the decline of the physical market, but rather an attitude of 'we'll see what happens', with developments in the physical market leading in the coming weeks.