The potato term has already been written off by some due to troubles surrounding the service and access to the market. This has certainly put the futures market at a disadvantage, but now that the ball is rolling again it appears that the futures market still plays a prominent role in pricing in the potato market.
It was a very difficult start to the potato futures market this season for the 2023 harvest. This was due to the termination of Saxo Bank's services in July (for this specific listing on the EEX in Leipzig) and the transition to the new party ADMISI in London . It is clear that facilitating parties have not taken the course of a potato season into account. The months of May, June and certainly July are important for building up futures market positions. Now that trading has started again in mid-August, it will be quite difficult to raise the total outstanding volume (read: number of contracts in position) to an acceptable level in the remainder of the season. To speak in football terms: we play in the tenth minute of the second half and are 0-4 behind.
Clarification
Various market parties indicated that they found it difficult to interpret the potato price at a time when the 'potato futures market' reference point was not functioning. What would the indicative market price do for French fries potatoes in the first months of 2024, especially in the context of the extremely high market price of the 2022 potato harvest in the latter part of the 2022/23 season? With the restart of the futures market at the end of July, the closing quote for the April 2024 contract on Friday, August 11 at €33 seems realistic for what happens in the physical market for, for example, Fontane delivery week 17. For example, week 8, €31 would be paid per 100 kilos.
The development of the current potato market for the 2023 harvest has been strongly influenced by the end of the 2022/23 season in combination with late spring followed by persistent drought in June. Various market parties have entered the month of July with some (or even great) concern, imagine it would remain dry! The latter has not been the case. In fact, it was enough in terms of precipitation at a certain point.
Stunted growth
With the start of the third week of August just around the corner, according to the various test harvesting results, the crops are very far behind the average of previous years, but there will certainly be more than a significant catch-up in the coming weeks. It is highly doubtful whether the multi-year average per hectare in the EU-4 countries will be achieved. Opinions on this are divided depending on the cultivation area where you inquire. Do you look in the southwest of the Netherlands or do you look in the northeast of the Netherlands and then across the German border into the large potato state of Lower Saxony. How the market price will develop further until the summer of 2023 always remains exciting. The fact that we will have to look more downwards in the coming period is already visible from the price decline of the various quotations.