The potato market continues to be weak

The potato market continues tot be weak. Even a reduction in the harvest estimate in France does not change that. Prices remain stuck at an exceptionally low level. The fact that a reduction in the harvest estimate in France by more than 200,000 tonnes has no effect on the market is indicative of this season. It is also said that a lot is being wasted. Even that does not change the situation for now. As long as there are still many potatoes in emergency storage and there is no significant recovery in the fries market, the demand for free potatoes will remain subdued. Cash settlement The potato futures market in Leipzig has established the first cash settlement this week. The cash settlement reflects what is being paid in the physical market for potatoes. At the end of the period, open positions are settled based on this value. The cash settlement is determined based on the physical market prices in the Netherlands, Germany, Belgium, and France. This price is established weekly. The first outcome of this season is €2.50 per 100 kilos. Prices in the Netherlands and Germany have lifted the level slightly; otherwise, the price would not have exceeded €2. Less than the feed price The cash settlement is €1 higher than the prices paid for Fontane—the largest variety in fries production. On the other hand, it remains remarkable that the fries industry—apart from contract potatoes—is currently apparently unable to pay more than a feed price for these frying potatoes. The low cash settlement price is therefore not a surprise. Remarkably, this is not even the lowest start ever for this quotation. Eleven years ago, the first price was even lower at €2.30 per 100 kilos. That year, prices in Belgium and France were slightly higher than now, but the prices in the Netherlands and Germany were even lower than they are now. The low price is experienced as very exceptional since until February of this year it seemed like the trees were growing into the sky. Many stakeholders in the sector did not take into account for a long time that the potato price would ever drop below €10 again. Aside from the corona year 2020, that has occurred regularly. Once every three years In the past fifteen years, this is the fifth time that the start of the cash settlement remains below €4 per 100 kilos. This actually means once every three years! However, those 'thin' years have a very large impact on the average level, which remains just under €13. The average in the ten 'fat' years is nearly €18 per 100 kilos. It should not go unmentioned that this average has also been significantly determined by the period before the substantial increase in contract prices. Currently, the contract prices during this period are higher than the average starting price of the cash settlement in the ten best years. Belgapom reports for Belgium, for example, a contract price of €19 per 100 kilos this week. The Netherlands has made the highest contribution in the past fifteen years with an average price of €14.35 per 100 kilos. Prices in Germany, Belgium, and France are unanimous at around €12.40 per 100 kilos on average. Irrigated fields In France, it is reported that there are currently some bids, but only for good quality potatoes from irrigated fields. There is no official quotation, but a supporting text mentions that some lots of supply potatoes are included for prices of €1.50 per 100 kilos for Fontane up to €3 for Innovator. Viaverda reports for Belgium depending on the buyer prices of €1 to €1.50 per 100 kilos. Belgapom, Reka-Rheinland, and PotatoNL all keep the price of Fontane unchanged at €1.50 per 100 kilos. Challengers are not quoted by Belgapom this week due to too few transactions. PotatoNL notes this week for Innovator a fraction higher at €3 to €5.50 per 100 kilos; in Germany, the price remains at €4. Agria notes in the Netherlands €6 to €9; in Germany, the price stabilizes at €7 per 100 kilos.