Nervous onion growers boost supply

The warmer weather is suddenly making many Dutch onion growers anxious. It leads to a growing supply in the market. What does that do to the prices? Temperatures rising to 15 to 18 degrees. Suddenly, spring announces itself. That also leads to a change in the mindset of many onion growers. In recent weeks, the batches could be kept calm and there was plenty of opportunity to ventilate. With the warmer weather this week, that becomes a lot harder. During the night it is still cool enough, but the possibilities are indeed becoming more limited. Moreover, this season we are dealing with a product that came into storage early, causing the onions to be physiologically a bit older than a year ago. The current product is comparable to the end of March last year, many say. More sprouting and bald After fusarium we are currently seeing more and more sprouting and baldness in the batches. As long as the sprout is still a small point, it poses no obstacle in sales. But that can suddenly change with these temperatures and soon there may be a 'thick fat yellow pit' visible, according to a trader. Once that is the case, there's little to be done with those onions. The fear of being too late in offering the onions is causing more supply this week. Meanwhile, demand is calm. Buyers are not buying more than they currently need for sales. This week is quite calm, and therefore, purchases are made only in small amounts. For good onions, 15 cents per kilo is usually paid. But there are also onions being bought at 11 and 12 cents per kilo. Finer batches with some tare and sprouting are being purchased at these low prices. Simply because there is also little demand for fine onions. Coarse onions sell well and buyers are often willing to pay a bit more for them. Last week, a batch sold for 16 cents. That was also discussed in the pricing committee at the auction in Emmeloord. However, it remains unclear to what extent that batch is retail-ready and whether there are documents (GlobalGap) accompanying that batch. Retailers are willing to pay a bit extra for the best quality. However, most of the onions are not suitable for that. Higher estimate of stock Earlier this week, we made a estimate of the number of onions available for export. An optimistic estimate comes out to a required weekly export of at least 20,000 tonnes per week. Some onion exporters and sorters are considering a significantly larger stock. They estimate a currently available quantity of 500,000 to 600,000 tonnes of onions. This means that 25,000 to 30,000 tonnes of onions need to be exported weekly to clear the market in time for the new harvest. If that last part works out, Dutch onion export will achieve an exceptional performance this year. A weekly export of an average of 20,000 tons would already be incredibly good, let alone the fact that another 5,000 to 10,000 tonnes of onions must be exported per week. To give an idea: in previous years, exports from February to the end of June dropped to weekly amounts of less than 17,000 tonnes. Capacity will not be an issue, as the onion companies have more than enough possibilities. The key lies in demand. To what extent can the market absorb the supply? So far, the possibilities seem limited and the Netherlands will have to settle for an export of 18,000 tonnes to just over 20,000 tonnes per week. As long as that does not improve, a significant amount of onions will hover over the market, of which the quality is not getting any better. Red onions A big question is also what the red onions will do. For a long time, it was maintained that the sale of red onions would only take off in the second half of the season. For that reason, the price development of these onions has held up very well – to the surprise of many parties in the market. However, the question remains whether there are not too many red onions in storage for the relatively short period in which these onions are suitable for market. If in the first half of the season one in ten of the exported onions was red, this share will need to increase to about one in three in the coming weeks. This is because a very large harvest of red onions was brought in last year relative to the others. According to the Dutch national statistics office CBS, the harvest of red seed onions last year delivered more than 300,000 tonnes. If 20% of that is lost due to drying and tare, 240,000 tonnes remain available for export. If one in ten onions was red until early February, then about 100,000 tonnes of red onions have been exported by the beginning of this month. The remainder will need to find a place in the upcoming period.