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Analysis Potatoes

Potato market reacts like an oil tanker

May 22, 2024 - Jurphaas Lugtenburg

Rain, rain and more rain, that has been one of the main themes on the potato market for over half a year now. After a drowned harvest in 2023, the seed potatoes for the 2024 harvest are now (locally) in the water, if they are already in the ground. It takes a while, but the wet spring is gradually gaining more influence on the potato market.

With some effort, quite a few potatoes were still planted on the few dry days this spring. Some growers are starting to wonder if they made the right decision. Last week, the south of the Netherlands got a lot of rain, on Monday the North got hit hard, and last night it was the turn of the central region. This doesn't mean that everything is lost, but there might be some fields that actually need to be replanted. The limited availability of seed potatoes could cause some problems.

The weather is not cooperating only in the Netherlands. Some processors had already planned for the early potatoes from Germany and France. They will probably have to recalculate, as there has also been local waterlogging there. The connection between the old and new harvest is not getting any easier. This could be a reason why the processing industry is not going full throttle.

Variation
All in all, there are enough reasons for tension in the potato market. Prices are indeed rising, but not at the pace many growers with free potatoes are hoping for. The PotatoNL showed an increase yesterday and the range is wide, with the lower end at €40 and the upper end at €52.

Criticism is heard from various sides regarding this wide range. On one hand, this week on the Pat list for the PotatoNL, there were two transactions below €40: 100 tons of Challenger at €37 and 100 tons of Donata at €35. On the other hand, Agria's (delivery in June) are being paid up to €60. Both are extremes, so let's just say that the pricing committee has chosen the middle ground, although there are also signals that not all transactions have actually been included. If those signals are correct, it is a regrettable development.

The futures market is reacting faster to the recent developments. The last contract for the 2023 harvest, the June contract, rose by roughly 20% in about three weeks and closed yesterday (Tuesday, May 21) at €45 per 100 kilos. The April 2025 contract showed a similar movement with an increase of over 20% since the beginning of this month to €34. Critics point out that due to limited turnovers, the futures market is no longer the benchmark it used to be.

Jurphaas Lugtenburg

Jurphaas Lugtenburg is a market specialist in onions, carrots, and commodities such as wheat, corn, and soybeans at DCA Market Intelligence. He combines his degree in business administration with a passion for farming.
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