Is the potato market about to explode?

First back to the current season of the 2023 harvest, which is in its final phase and, just like the previous season, is again overflowing with tension. Once again this season, the market is showing a trend whereby a strong upward price movement starts after week 17 (settlement of the April futures contract).

As in most seasons, processors often have the positions well organized until week 17, but gaps still need to be closed for the final months of the season. Of course, the planting date and growth development of the new harvest are decisive.

Weather market
It is now a fact that for the second year in a row the exceptional weather conditions have a major impact on price developments in the last months of the season. The late planting, the extremely wet weather conditions and the very poor soil structure mean that a moderate and late supply of the first early potatoes must be taken into account.

Yet it seems to be this sentiment that is driving the market higher. If you look at the processing of raw material and export figures for fries, this would rather indicate a somewhat larger stock of fries in the cold stores and a lower demand for processed product.

Processors do not want to run the risk of running out of potatoes and are assured of raw materials for the last period of the 2023 harvest year, and are buying up the last cells of potatoes at hefty premiums. These prices rise to over €50 per 100 kilos and for Agria, for example in a niche market such as peeling, the market price is now rising towards €60 and more, double what was paid in contract prices last season. It does indicate how volatile the potato market can be at times. An image that may become the new normal. Basically it is not possible to contract against this.

No shock absorbers in the market
In fact, if the processors have good coverage, there will be a long stable price period. However, if a logistical problem arises, such as last August during the off-farm period, the market price can quickly fall back (September 2023, Belgapom recorded €10). In the event of a shortage and/or an expected shortage, the price can also rise quickly and very high. In both cases (falling back and rising) this often happens uncontrollably.

In the development of the market price for the coming harvest (2024), a similar trend appears to be visible as in the 2023/24 season, but the starting position seems even worse with the month of June in view. The futures market quote for the April 2025 contract is already above the €35 level, a price level going back in time that has not previously been reached on the futures market around this time.

The current ingredients are there to further explode the market, after all, not all potatoes are in the ground in the EU-4 countries yet and summer is coming! Many growers are anxious about the coming growing season. In a dry summer, the potatoes are not expected to reach a five-year average yield. In short, nothing is what it is and seems anymore!