Onion jam causes a shift in the market

The pig farming sector often faces a pig jam after the holidays. An excess of animals in a quieter market. The onion sector is already dealing with an onion jam this year just before Christmas. This is a major disappointment that also comes at a very inconvenient time. Just when the shopping for Christmas needs to be done, sales suddenly drop. Some West African destinations can no longer handle the large influx of onions and are postponing new purchases for the time being. These developments directly impact the overall market. Selling prices are suddenly under pressure, while sellers had previously expected continuously rising prices leading up to Christmas. Instead of sale prices climbing to 26 to 27 cents per kilogram, we suddenly drop back to around 22 cents per kilogram. Consequences for purchasingThe reversal in sales also has implications for purchasing. A few weeks ago, the sorters and packers already bought a significant quantity expecting sales to increase before Christmas rather than decrease. The stagnating exports mean a major setback for this calculation. As a result, purchasing will be temporarily halted while awaiting further developments in exports. On the other hand, there are growers who still want to do business before Christmas. In a market where demand falls away, this results in extra price pressure. Where the supply was previously absorbed very quickly, purchasing now comes almost to a standstill. A price level of 20 cents per kilogram delivered in December had already fallen out of sight, as there were more than enough growers wanting to trade. Now with the stagnating sales, even 18 cents seems too ambitious, and the market drops to around 16 to 17 cents per kilogram. Whether calm will return after this price drop and the market can quickly rise again remains to be seen. With sale prices of 22 cents, the path upward is not suddenly reopened. First, the over-supplied markets in Senegal, Ivory Coast, and Mali must process the surpluses, and then it must be seen to what extent customers are willing to take planned quantities. Exports do not suddenly drop to zeroOn the other hand, it is also not the case that exports suddenly drop to zero. Exporters and sorters estimate that exports will decrease this week to a level of around 30,000 tons. Some think just slightly below this, while others expect just slightly above this level. After weeks of over 40,000 tons, that is quite a significant step back. The disappointment also causes companies to hold even more reserves regarding purchasing for early next year. There are concerns about the expectation that Senegal will indeed close the border for import onions as of January 1. Nevertheless, some companies assume that a significant quantity of onions can still be shipped to this West African country in January. This is partly related to the early Ramadan starting in mid-February. During and shortly after Ramadan, a lot of onions are consumed. Local production is not yet at a level to meet this demand. Hope for sales to PolandMeanwhile, there is hope that Poland will provide additional support for the market. So far, the sales of lower quality to this country remain very small. There is demand, but the prices being offered are far too low for serious sales. The Poles are currently mainly interested in bald onions. For these, they are willing to pay only 3 to 4 cents per kilogram. Moreover, they want coarse onions for that price and not too much tare. The low prices are currently preventing Dutch companies from delivering larger quantities to Poland. Last year, the Polish onion industry provided a solid foundation in the Dutch market. Large volumes went in that direction. That is not currently the case. Official figures indicate that there is a smaller harvest in Poland (-7%), but this does not align with the very low prices in the country. Moreover, companies there state that a lot of onions have indeed been harvested. All in all, Dutch companies are noticing that there is more interest coming from Poland at the moment, but they are still not willing to pay higher prices.