The summer holidays are well and truly over for the potato processors. Slowly but surely the factories are starting up again. And with the start of production, there will also be more commotion on the market. Although that turns out slightly different than what many growers were counting on.
The PCA/Fiwap makes this clear. "The price for early potatoes is €30 to €35, with €30 as the most commonly used price. The market remains in flux with falling prices. The number of transactions for free potatoes is limited. Contracts are mainly used. The supply is larger than the question," PCA/Fiwap writes in the explanatory notes to today's quotation (Wednesday, August 16). Last Monday there was still a 4 for the potato quotation on the PotatoNL, but here too the trend has started downwards.
PCA does identify the major bottleneck in the current market with the contracts in the explanatory notes. The average contract price in the Netherlands for delivery from Fontane land is €17,15 and for Innovator at €19,15 (the earliest potatoes are slightly above that). And we have almost forgotten, but in the winter - well before the start of the season - the processors visited the growers. At that time, the general mood among the growers was (so to speak): how many can I record instead of do I have to record them. Now that we have ended the old season at a historically high level and have started the new season on the same footing, it is a bitter pill for growers who, in retrospect, may have contracted a little too enthusiastically.
Comfortable
In the background, there may be something else playing a role in the potato market's slide. In July and early August, processors are hardly on the market for potatoes due to the summer break. To put it very briefly: whether the quote is €40, €50 or €60 does not matter much to them because they are not buyers anyway. Now that production has started, the processors are buyers and a higher price will hurt their wallets. By starting processing a little later and with a relatively large share of contract potatoes in the mix, processors also have tools at their disposal to manage the market more actively. With the contract price in mind, you can pretty much figure out the level at which processors feel comfortable. The big question is whether (free) growers can provide sufficient counterbalance to this.