Domestic market update – March 2021

'Throughout February, free-buy and contract demand remained quiet across the board'

Throughout February, free-buy and contract demand remained quiet across the board. Cold and snowy weather at the start of February, combined with the national lockdown, curbed many opportunities to eat out-of-home, therefore dulling demand.

February saw the release of the GB end of January stocks figures . This pegged grower held stocks at 2.11Mt, 39% of total production. This is 47.36Kt lower than last year (January 2020), but 40.86Kt higher than the 5-year average (2016-2020). Of that 2.11Mt, 61% has been previously sold either as a forward sale or on pre-season contracts. This suggests contracted movement will continue to dominate potato trade into March and beyond.

The government’s roadmap for easing lockdown restrictions was published at the end of February. This release put key dates in the diary for potato markets, with the first step to open schools in England on 8 March. For summer, many consumers are reportedly hoping and planning for domestic holidays. However, this is under the premise that no curve balls throw the roadmap off course. The release of these lockdown lifting dates has helped breathe some optimism into the market.

As growers look to decide area for next season, forecasts and industry speculation point towards a reduced potato area in 2021. With 2 years of pressured prices and weather challenges for some, this may be unsurprising. However, if planting conditions are more clement this season, in conjunction with the roadmap, some may give potatoes ‘another go’.

Trade overview

Free-buy
Free-buy markets remained quiet through February. Pre-pandemic, industry sources said that trade would usually pick up at this time of year. From the end of January to end of February, the WAPS free-buy price fell by £3.29/t, to £132.04/t, despite some fluctuations.

Contract
Most trade remains to be fulfilled on contract across the different sectors. The overall WAPS price (including both contract and free-buy price) fell by £5.43/t over the same period (end of Jan to Feb), to £164.58/t.

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