Analysis Onions
Onion market is a barrel full of contradictions
It's difficult to grasp the onion market this week. Confidence in the onion market varies from grower to grower and from sorter to sorter. Almost no one is truly convinced whether the market will go up or down. This flat mood can be seen in the DCA Benchmark Price for packed onions this week.
One grower is still unsure if things will turn out well with the onions and wants to do business before Christmas at all costs, while the next one says for this money, I'll take the risk that they will yield more in the spring. A similar contrast exists among sorters. One is overwhelmed with work and barely knows how to manage everything, while the other is doing fine but not more than that. The common denominator we can find is that people prefer not to trade too much and too far ahead.
Changing Course
The group of growers who are now getting a bit nervous generally consists of farmers who stood firm at €18 three or four weeks ago. Now they offer the same onions for, figuratively speaking, €15 and the sorter doesn't want them. Packers who are less busy are not in the market because they don't have the extra sales. Processors who are fully booked and would like to buy more if the price is right are not doing so because they doubt the quality. After all, a grower must have a reason to suddenly want to lower the price. "If you have to produce tons to fulfill orders, you shouldn't worry about lower-quality onions that will slow you down. Cheaper onions will ultimately cost you money," said a sorter.
The variation in workload among sorters this week is also noticeable in the DCA Packed Onions Price. After weeks of limited increase or a stable market, the medium and triplet onions are taking a step back now. Last week, €26 was quite common for the widely traded size 50-70. This week, €25.50 is doing well. That also says something. After a few seasons of fluctuating prices by a few cents at a time, it now sometimes depends on half a cent.
