Bringing the message that a market - in this case of potatoes - implodes are not pleasant. All in all, you become a bit sad about the situation in the potato market. The idea, not long ago, that the price would follow the track of the two previous seasons with €40 and more, is out of sight.
Before light comes back into the dark tunnel, there are still big steps to be taken. The few positive signals in mid-February were indeed there, but that things would go at such a high pace from an average of €32.50 in DCA EU-4 Potato Index of week 7 to this week (just two weeks later) €24.65, no one had foreseen.
Market drops quickly
The average quotations are therefore lagging behind the market due to the delaying effect of the pricing mechanism (read: method of quoting). The next step will go further down and will be visible next week as the current daily price (if there is any buying) for Fontane is €20 per 100 kilos. In that sense, a correct representation of the market is noted in Germany (Reka) and Belgium (Belgapom and Viaverda). The same picture is naturally seen in the other varieties. For Innovator (until recently the absolute front runner) €25 has been paid, but then on April and the first two weeks of May delivery.
The question now is where the bottom lies or better said: how deep is the pit now that the market price is collapsing so hard. It is always wise to bring some nuance to the story. If a market price is at €30, then €40 is the next step, but if a market rapidly falls towards the €20 level, then €15 could already be in view. The fact is that in such situations, suppliers are competing with each other, while processors take a wait-and-see attitude. It should be noted that the current weather does not promote the mood. February has been relatively dry in the EU-4 countries and the weather forecasts for March are currently favorable. Spring may be just around the corner.
Confidence is temporarily lost
It has not been much different in the potato market. Confidence comes on foot and goes on horseback. The current negative sentiment reportedly also has an effect on the upcoming season. The favorable contract prices have led many growers to opt for certainty. Most processors indicate that they have already secured enough for the 2025 harvest. Moreover, especially in Belgium, contract volumes are already being reduced again. Perhaps in the potato sector, in recent seasons, there has been a bit too much euphoria when it comes to raw material prices and product sales, prompting a search for a brake somewhere.
