Analysis Potatoes
Potato market makes a steep descent
The cautious first signals were already there, certainly in the last few weeks, that the market was at its peak. After mid-December, when the farm potatoes and problem lots were cleared, the potato market rose to the top of the mountain in a short time. Today, however, it can be seen that the potato market is on the snow slope (read: steep) towards the valley.
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Choose the subscription that suits youWith the same speed at which the market rose in the period December and January and then stabilized in early February, the market is falling back with the same speed with the month of March in sight. Both in Belgium (Belgapom, Friday 21 February) and in Germany (Reka) Fontane is quoted at €25, no less than €5 lower than a week earlier. Varieties such as Innovator (€32, -€8) and Agria (€30, -€6) are also falling back more than sharply in price if we take the Reka of 21 February.
Market on a silk thread
The market shows once again that it is a thin cable on which the elevator hangs. A little demand makes the market rise quickly and the lack of demand makes the market fall just as quickly. It seems to increasingly depend on moments and on specific demand (temporarily) from market participants who do not have their position in order.
The fact is that the price increase of the last months was caused by a Dutch processor. The Belgian processors kept their cards close to their chest the longest before they went along with the price increase. When they eventually also started to increase, things went fast. For Fontane delivery April, the grower was paid €35 until two weeks ago. A number of traders even paid €32 for a short time. Now that the original purchasing parties have their positions in order again, little interest is shown anymore. The weakening of exports is also not helping to give the market a bottom.
Challenges enough
The next litmus test for the resilience of the market will be in the weather developments: will we get an early spring or will the start of the planting season be postponed for a while? The other brain teaser is the still lagging sales of processed product. Both the figures for Belgian and Dutch processing exports indicate a levelling off of that market, whereby the impression of stock building in the cold stores cannot be completely ruled out.
The malfunctioning of the market seems to be getting bigger as a problem. One week it is hallelujah and the next week it is a vale of tears. From a contractual position there is little reason to worry about this, however many potatoes (pool potatoes, free potatoes and potatoes supplied with the market) are settled one way or another at a market price of which, as mentioned, little can be said anymore. Fluctuations of €5 per week hardly ever occurred in the past, there was often more the way of gradualness. Now the market has degenerated into an all-or-nothing show where it is difficult for a grower to anticipate.
To care
Apart from the fact that there are hardly any transactions in a declining market, which makes it difficult to make a listing. This development of the market is worrying and will pose major challenges to the potato sector in the coming years, but will also cause tension between grower and buyer. After all, contracting all potatoes is not desirable, nor is it possible. The yield fluctuations are such that selling your entire harvest is equivalent to Russian roulette.