Analysis Potatoes
Current precipitation deficit above the 2018 line
There are years with a precipitation deficit and there are years with a real precipitation deficit. In the harvest year 2018, which is still relatively fresh in the memory of most stakeholders, there was a serious precipitation deficit. The harvest year 1976 was even briefly equalled in 2018. The current harvest year has, after a small 'kink in the cable' at the beginning of June, picked up the 'dry line' again and is still above that of the harvest year 2018. What does this mean for the mood on the very difficult potato market?
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Choose the subscription that suits youIn 2018, the hangover after the 2017 harvest year – when, just like today, there was a surplus of potatoes – was very big. The "hangover" did cause a reduction in the area in the EU-4 countries, but the real "hangover" was washed away by the persistent drought. For a long time, the market for the 2018 harvest remained around the level of €15 (futures market quotation April 2019), with the expectation that if it were to rain, nothing would come of it again. With the knowledge we have now, things turned out completely differently at the time, with market prices of the almost unthinkable level of €30 in those years.
Growing season determines
The weather during the growing season normally determines the mood on the potato market. Given the graph above, it should "happen" towards week 27, during which period the direction should be determined. The emphasis in the previous sentence is "should", since there is no positive signal to be seen halfway through June. The situation on the current potato market is almost bizarre, with a large volume of potatoes not being processed into fries. The factories are trying to meet the agreements made as much as possible, but none of the long-term holders had counted on delivery prices from Markies, Innovator and Fontane below €10.
Faith is lacking
Conclusion: in terms of weather conditions (read drought) in the EU-4 countries, the signals should gradually turn green. However, the mood surrounding the end of the 2024 harvest market is, to put it mildly, so bad that hardly anyone involved in the potato market believes in it. Apparently, the balance between the supply of raw materials and the sales of end products has been disrupted to such an extent that a disaster (read the drying out of potato plots in the EU-4 countries) must happen - otherwise it will be a disaster. This is also evident from the futures market of the April 2026 contract, which closed on Friday at a meager €16,20, with sufficient supply at a somewhat higher level but virtually no buyers.