The Dutch potato sector will have to do without potato quotations for at least another two weeks. The four parties that compile the weekly PotatoNL quotation (LNCN, NAO, Vavi and ZLT) do not agree with each other about the working method and the protocol.
On Monday, July 8, three weeks ago, PotatoNL posted its latest potato prices. It will take at least another two weeks before this changes and the first prize for the 2024 harvest year is compiled. Only then will the parties involved sit down again after the holiday period has ended.
Summer break
It is not unusual for there to be a summer break in the listings, even though PotatoNL has the ambition to list year-round. That is not the case every season. Last year there were three weeks in between. In 2019, after the special harvest year of 2018, it even took 13 weeks for a new quotation to appear on the boards. There has also been no input from the industry on the DCA PAT Index since July 8. Yet there is more going on than simply a lukewarm market period.
What exactly is going on behind the politically correct comment 'no agreement' remains a bit of a guess. There has been a lot of friction between cultivation, trade and processing that together make the quotations. 'Without friction there is no shine', as the saying goes, but this seems more like sand in the engine. At the end of October there was also a week of silence because the parties did not agree offer achieved. During the Potatoes Theme Day, held in Dronten at the beginning of this year, PotatoNL steering group member Mark Brantjes quiet with the situation surrounding PotatoNL and the lack of free transactions.
Hot topic
One of the hot issues – if you can call it that – is the inclusion of so-called 'supplier kilos' in the quotations. These are the non-contractual potatoes that processors collect from their growers and which are usually charged at the daily price. That daily price is then referred to the PotatoNL, which creates a situation where the butcher inspects his own meat. After all: In a hypothetical situation, this instrument can be used to direct the market to lower prices.
Due to a lack of truly free transactions, these co-delivery kilos have been used to achieve a quotation. Yet it remains a thorn in the side, also of the processing industry. In turn, he fears that this will raise competition issues. That fear is real, since the Belgapom-listing with its southern neighbors was under the magnifying glass of the competition authority for three years. Ultimately, this listing was able to meet the requirements with relatively simple adjustments.
'Parties support PotatoNL'
PotatoNL chairman André Hoogendijk also does not comment on which issues are on the table. When asked, he did say that all parties still support the listing and intend to list 'normally' again soon. "It is customary for us to review the way of recording prior to the new season. We try to do that before the holidays. This year we were unable to do so because there are more issues on the table."
It is annoying that the potato market has no explanation at the start of the new season. Apparently there is serene peace, but the processors continue as usual. There is certainly no question of standing still. The absence of the PotatoNL listing now has no effect on the Cash Settlement, for example. That won't come into play until November. This may be different for potato growers who now have to pay for early potatoes at the daily price. How do you test whether the price offered by your processor is in line with the market? After all, falling back on the potato futures market is not an option. It is therefore important for the potato sector to reach a compromise as quickly as possible.