While the decline had already started last week, that does not seem to change this week. The market is in a downturn and insufficient demand is causing a downmood in the market. The Dutch market seems to be reacting in a kind of slow motion to the sharp reduction of Belgapom 3 weeks ago.
Belgapom again recorded €5 today and shows no sign of recovery. The Dutch market always shows a slowdown compared to that of Belgium, both up and down. Over the years, Belgium has become the price trendsetter, which the Netherlands was for years. {{dataviewSnapshot(2_1616770318)}}
Different methodology
The fact that the Netherlands is reacting in slow motion to Belgium is mainly due to the payment method that various processors use for the potatoes supplied. Payment is often based on an average price of the week before, which is then used as input for the various quotes and transaction lists.
At the beginning of January, this meant that other countries had long been recording and paying €7 to €8, but the Netherlands remained at €5 to €6 for a long time based on transactions involving co-delivered potatoes. This is very disadvantageous for growers, but it also applies the other way around. Now they are still charged at €7, while the free market for potatoes in the Netherlands has no real bid for immediate effect and is tending towards €5 rather than €7.
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Corona continues to hang over the market
The drop in demand from processors seems to be the main reason for the further weakening of the physical market. The inability to control corona in the world and in Europe results in longer closures of catering establishments, festivals and the like. Many people had hoped, and taken into account, that people and companies would be able to breathe again at the beginning of March. But with the still rising infection rates, that is not possible for the time being. Processors have therefore put on the brakes and insiders say that a number of factories will shut down lines in the coming weeks to cope with the drop in demand.
The new harvest continues to do remarkably well in this negative market. With a quotation of €16,60, this price is clearly higher for the time of year than in previous seasons. This is mainly motivated by the optimism that we will return to the old normal next season through vaccination.
The difficulty in contracting potatoes with growers also gives the market a positive mood. This combined with a shrinking acreage in Europe results in an above-average price for this time of year. Whether this can be maintained will depend, among other things, on the start of the planting season and the start of growth in Europe. {{dataviewSnapshot(2_1616770400)}}