The potato market in the EU-4 countries has felt unabatedly stable in recent weeks. This has resulted in a market that has made significant steps in a short time from an average of €30 per 100 kilos to now €35, with the month of May cautiously in the picture.
The significant price increase can also be seen in the April 2023 listing, which will close next week, Thursday April 27. The cash settlement (CS) with which the outstanding contracts will be settled is expected to be just above the €35 level. This means that the potato market does justice to the developments of the 2022 harvest, which remained significantly below par, especially in Belgium and France. Add to that the excellent sales of the end product and the ditto demand for potatoes, and the story of the 2022/2023 season has been written. It was therefore remarkable that only recently the futures market fell back to €28, while at the same time around €25 was being contacted for the 2023 harvest year. Confidence in a positive outcome despite all known information, especially from Belgium and France, was apparently limited. In retrospect, this was a misconception considering what is happening now in terms of market price development.
Looking for the top
The fact remains that the ball (read: market) has been kept under water for a long time and is now emerging rapidly, in combination with the clearly somewhat later spring. The question that arises is what else is possible in terms of market price levels. It's not even May 1st yet and the average market price is already in the mid-thirties! The storage season is far from over, so why not move towards €40 in the short term? The market price development can certainly be seen as historic, because in the 2018/2019 season the current price level (€35) really turned out to be the top end. Many years have now passed and we really live in a different world when it comes to the cost price, but also the sales of the end product, as evidenced by the contract price level for the 2023 harvest year.
After next week, the futures contract for the April 2023 quotation will be over and, due to the troubles caused by the cancellation of the clearing (Saxo Bank), there is no longer a good indication when it comes to the futures market for the June 2023 quotation. The 'story' must be made from the physical market, where, as mentioned, €40 is the next step. And what else is possible? Are chip factories willing/able to pay even more for the raw material or will €40 become the new price ceiling, which was only €2018 only recently (harvest 30)? Interesting times that all stakeholders will follow with great interest as it provides insight into what is possible for the coming harvest years!