The fact that the market for French fries potatoes is volatile despite all the security that is sought by making price agreements (read: contracting) has once again become clear over the past six months. The difference between the last cash settlement (CS) last season and the first this season is large.
The first CS for the 2023 harvest, €13,70, was announced on Thursday, November 9, by the stock exchange company EEX in Leipzig. That is no less than €37 lower than the last CS of the 2022 harvest (2022/23 season), which stood at the historical price level of €50,70.
Each season has its own story and it is often unknown what will be written in the final chapter. The current harvest year will also be one you will not soon forget. A late and then dry preseason, sufficient rain in July and August so that the crops could pick up growth (but with high disease pressure) and a very wet second part of the harvest season with an uncertain result. As the situation now appears, not all potatoes will be harvested in (particularly) Belgium, the Netherlands and France, but how much volume that will be remains to be seen. Quality is also and will become an issue, but initially not a positive point for market price development.
The Netherlands in the lead
With regard to the contribution for the first CS of the season, the Netherlands predominates with €16,24. France (€12,60) and Germany (€12,71) are much lower in comparison. The contribution from Belgium (€13,35) is in between.
The difference between the CS and the closing price of €27 of the futures market April 2024 contract is significant at more than €13,30. However, it is likely that the potato market will catch up towards the contract price level during the storage season. The question is whether the contract price level will be completely feasible for varieties such as Fontane and Challenger. But for varieties such as Innovator, Markies and certainly Agria, this should certainly be possible with a plus. Based on this idea, a potato futures market much lower than €27 (say €24,50/25,00) is not an option.