The corona crisis leaves its mark on the potato market. Large stocks and less demand are currently disastrous for the trade in free potatoes.
PotatoNL has not published a target price for potatoes for weeks. Chairman Mark Brantjes states that in principle it is listed year-round and that the aim was to start the listing for harvest 2020 in mid-August. ‘But then there must be trade; we cannot record without transactions.
Brantjes explains that the listing committee within PotatoNL decides autonomously whether or not there will be a listing. ‘We now notice that the first transactions are carefully notified. Once those transactions provide sufficient information about the market, this will result in a listing. The listing committee does have weekly consultations on this.
It is clear that the potato market can use a boost. Since the beginning of the corona crisis, a lot of demand for french fries has disappeared. For the Dutch situation, it meant that of the 1.5 million tonnes of french fries potatoes in storage, it was estimated that only one third could still be processed for direct sale.
Some of the surplus has been resolved through the government’s compensation
scheme. However, many contract potatoes are still processed and stored as finished products in freezers.
Filled with contract potatoes
Analysts warn that harvest 2019 will continue to hurt the potato market for a long time to now. Stockbroker De Vries & Westermann writes on his website that the manufacturing industry runs at 80 to 85 percent of normal capacity. As a result, the raw material requirement can be filled almost entirely with contract potatoes.
The demand for free potatoes is expected to be limited until the turn of the year. This week, handelskoepel Belgapom in Belgium recorded a price of 2.50 euros per 100 kilos for early potatoes. In Germany, free potatoes are supplied for starch production and animal feed with prices between 1.50 and 3.50 euros. The first transactions in the Netherlands were closed at comparable prices.
French fries potatoes
On the futures market, the quotations for french fries from harvest 2020 on delivery in April 2021 have fallen this week to a level of 6.50 euros per 100 kilos. Last week there was a rebound to 8 euros after disappointing trials.
The pass at the site is a result of the growing weather of the last period, harvest samples now predict an average harvest. Even in the futures market, hardly any business is done.