Analysis Onions
Fear of buying onions too expensive prevails
After two seasons with a flying start, the wind is blowing from a different direction over onion fields. Growers who still need to sell onions grown from sets are having trouble finding a buyer. Sorters are also holding back on onions grown from seed. Growers and processors are struggling to find one an other.
In a rising market, everyone can do business, but in a declining market, the wheat is separated from the chaff. Sets-grown onions often face a tough market as soon as the seed-grown onions enter the market. There is still a market for good planting onions, but if there is any imperfection, only the industry remains. Buyers do not feel rushed to secure enough seed grown onions. The onions written down in the order books early in the season have turned out to be too expensive in hindsight, and buyers seem to estimate the chances of prices falling further to be greater than the market making any upward moves.
Giving away can always come later
Growers with seed grown onions are not eager to sell below cost price before they are even harvested. Giving away te product can always be done, or else I'll figure out a way to store them temporarily, that's how it sounds. The danger here is that there will be a lingering oversupply of onions in the market for a long time. This is separate from the onions that cannot be stored for long due to quality reasons. This season, there are likely more of these due to the wet growing season.
The export is not doing too bad for this time of the year. The most recent export figure is distorted by a shipment to Senegal, but several sorters indicate that they have had good business this week. The variety of destinations is striking. Central America, Israel, some Asia, and Africa: buyers for Dutch onions are spread across practically the whole globe. Ivory Coast is showing strong interest in Dutch onions, but ideally one or two more bulk buyers should come in. We miss Senegal, is a comment that is frequently heard. The exact timing of when Senegal will open its borders to foreign onions is not known at the time of writing this article.
Poland takes action
What is outright positive is that Poland is doing quite well in the market. The Polish industry is almost traditionally taking on the role of the sweeper for onions with a story. Several sorters indicate that they are also doing a significant amount of big bag work for Polish buyers. Some think they want to take advantage of the relatively low prices in the Netherlands to save their own stock, while others see it as a sign that there may be more issues with the onion harvest in Poland than we suspect.
Stabilizing the bale price is not successful this week either. The DCA Bale Price Onions takes a step back again, ranging from €16 to €22. Customers wait as long as possible to place orders, as prices could still drop, and sorters are cutting corners sharply to secure the order. This is the vicious circle we have been stuck in for weeks and cannot seem to break out of. At such times, the large sorting capacity and the internal competition we have in the Netherlands work against us.
Read here the explanation from DCA Market Intelligence on the new listings.
