Reports that a market - in this case potatoes - is imploding are not pleasant. All in all, the state of the potato market makes you a bit sad. The idea of only a short while ago that the price would follow the path of the previous two seasons with €40 and more, is gone.
Before there is light in the dark tunnel, major steps still need to be taken. The few positive signals in mid-February were certainly there, but that things would go at such a high pace from an average of €32,50 in DCA EU-4 Potato Index from week 7 to this week (only two weeks later) €24,65, nobody had foreseen.
Market is falling fast
The average quotations are also lagging behind the market due to the delaying effect of the price mechanism (read: method of quotation). The next step will be further down and will be visible next week as the current daily price (if it is bought at all) for Fontane is €20 per 100 kilos. In that sense, a correct representation of the market is recorded in Germany (Reka) and Belgium (Belgapom and Viaverda). The same picture can of course be seen in the other varieties. For example, €25 was paid for Innovator (until recently the absolute leader), but then delivered in April and the first two weeks of May.
The question now is where the bottom is, or rather: how deep is the hole now that the market price is collapsing so hard. It is always wise to add some nuance to the story. If a market price is at €30, €40 is the next step, but if a market rapidly drops towards the €20 level, €15 would also be in the picture. The fact is that in such situations suppliers roll over each other, with processors adopting a wait-and-see attitude for a while. It should be noted that the mood is not being improved by the current weather. February was relatively dry in the EU-4 countries and the forecasts for March are also favourable in terms of weather type for the time being. Spring could soon be on the horizon.
Trust is temporarily lost
It has not been much different on the potato market. Confidence comes on foot and leaves on horseback. The current negative sentiment is said to have already affected the coming season. The favourable contract prices have made many growers decide to opt for certainty. Most processors indicate that they have secured sufficient for the 2025 harvest. In fact, contract volume is already being cut, especially in Belgium. Perhaps the potato sector has been a bit too euphoric in recent seasons when it comes to the prices of raw materials and sales of end products that a handbrake is being sought somewhere.