Analysis Onions
A large bulk of off-season onions is absent
Records are not being broken, but things continue to run smoothly in the onion market. Growers and processors are not completely aligned in how they perceive the onion market. Farmers are gradually gaining more confidence while packers and traders are more cautious.
A large bulk of off-season onions suddenly hitting the market has not yet materialized. According to various insiders, a relatively large number of onions have been put into temporary storage. Whether this is due to a shortage of trucks or because growers expect more to come is hard to say. The question looming over the market in the short term is: when should those onions be moved?
Normally, mid-October is the target, when potatoes need to go into storage where the onions currently lie. Growers will likely stick to that for onions that already have a buyer. With a late planting date, the potato harvest won't be early. The fact that potatoes are still not harvested could make it tempting to store the onions for a few more weeks - of course, for a storage fee. For the unsold onions, growers also seem to be in less of a hurry to find a buyer. Not that grower prices are suddenly jumping, but you can tell that farmers are more confident compared to a month ago.
Getting to work
In terms of exports, the first 30,000 tons have been shipped this week. Exporters and sorters, however, are not overflowing with enthusiasm. Everyone is doing good work, but going all out and, for example, running two shifts to get all orders filled, is not happening. Given the increase in acreage, even with an average yield, a substantial amount of onions still need to be moved. A couple of weeks of 35,000 or 40,000 tons would be welcome in that regard.
Some doubt whether a processing capacity of 40,000 is still achievable. A fairly large player who normally does a lot at the beginning of the season is currently idle. Perhaps even more challenging is finding enough staff. Many sorters have invested in optical sorters, but manual inspection remains necessary. People are also needed for loading and unloading. Whether it's someone on the line or a forklift driver, it's difficult to find someone, as several sorters complain.
The DCA Benchmark Prices for Packed Onions remains fairly stable. Instead of the increase that was somewhat expected last week, the benchmark prices remains largely unchanged. Large sizes remain scarce and in high demand. The finer sizes, especially the triplets, are under a bit of pressure.
