Analysis onions
Supply of onions further lowers DCA market price
After a hard 'reset' of the DCA Benchmark Price last week, the tide has not turned this week. Sorters and exporters receive a lot of supply from the field, while the export engine simply does not run at the same speed as last season. However, in terms of sales, it seems we had a better week. The question remains whether that volume and feeling can be maintained.
Driving around in the south, you can see that many planting onions are now lying in windrows. Ready to be picked up. Other A complete overview of the DCA bale price with explanation can be found here.fields are already empty, and it becomes clear that the yield of planting onions is not disappointing this season. The abundant moisture has resulted in favorable growing conditions, leading to higher yields. Real top onions are meeting expectations so far, with sorters indicating that they had estimated the size to be higher for this time of the year. Quality is sometimes a concern, but on average, not different from usual for planting onions.
It was or is just a bit of an adjustment when agreements had to be made about the price with the grower, as it remains under pressure. This was also evident in the market price for Goes this week. While last week you could make €15 or slightly more per 100 kilograms for planting onions from the field, this week it is €12 or €14 per 100 kilograms. With hot weather expected after the weekend, growers and sorters are in a hurry to get the planting onions in on time. 'For maintaining quality, you don't want the planting onions to still be lying in windrows with high temperatures next week,' a sorter explains.
After the 'reset' of last week the DCA Benmark Prices are also under pressure this week. However, the decline in price levels is less pronounced, and a further sharp decline is not likely. The instability and uncertainty of this market do not help in sales. Importers are holding back in such a market, as onions could be cheaper later on. On average, according to the DCA bale price notation, bale prices are decreasing by a few euros to an average of €25 to €26 per 100 kilograms.
The supply of triplets is limited, but the demand is also low. Triplets are often sold for well below €25 per 100 kilograms, depending on the destination. With these bale prices, fixed agreements and prices that sorters made with growers weeks ago are under pressure. Especially the agreements made well in advance around a grower price of €20 per 100 kilograms.
What will the coming weeks bring?
Opinions among sorters and exporters are divided on when stability will return to the market. On one hand, exports to Africa are increasing, and we had 'a pretty good week' in terms of sales this week. On the other hand, next week could be different again, while the supply is piling up. For example, this week Senegal unexpectedly boosted exports with a shipment. However, it will remain just that one shipment for now, and the import border will close again, resulting in several weeks passing without the country that forms a stable engine for Dutch onion exports. Other African countries are taking more volume than before, and demand from Central America is also providing extra work. Europe remains relatively limited, except for a few countries like Belgium. If demand continues in the coming weeks, the onion market will sail into calmer waters.
With the current DCA market prices dropping to a level where there can be more competition in onion exports, new destinations come into view, such as the Middle East and even Asia. However, it remains to be seen how far other exporting countries can go. But when seed onions hit the market with better quality, further destinations will certainly offer opportunities in sales.
A complete overview of the DCA Benchmark Price with explanation can be found here (in dutch).
