Large onion stocks off Senegal’s coast slow sales

The onion market is now determined less by demand than by what is actually available. Large onions in particular are scarce and that is translating into rapidly rising DCA Packed Onions Benchmark Prices. At the same time, there is some tension in sales. Senegal has not yet opened the border and, according to traders, there are already 25,000 to 30,000 tonnes of onions off the coast there. As a result, exports may temporarily ease off a bit. Supply picked up again last week because harvesting could take place in full after the rain. That was also badly needed. By the end of last week, several sorters and packers were almost empty. An exporter reports that orders were cancelled because the onions were simply not in stock. Meanwhile, a lot of product has come in within a short time. As a result, some buyers are taking a step back from the purchasing market for a while. However, that does not mean the mood has changed. Purchase prices have risen to around €25 to €30 per 100 kg and the selling price has to follow suit. DCA Packed Onions Benchmark Prices have taken a significant step up over the past week, but given the purchase prices they still need to move a little further toward €35 to €40 per 100 kg. Size is becoming decisive The most important theme is sizing. Lots clearly contain fewer large onions than in a normal year. Where sorters are used to about 60% of a lot being large, 40% to 50% is now more often mentioned. Drought and several heat waves cost a few weeks of growth and that is reflected in the sorting. Traders therefore expect the price difference between small and large onions to widen further. This picture is also reflected in the DCA Packed Onions Benchmark Price. For small onions, prices this week are quoted at around €27.50 per 100 kg, about €3.50 more than a week earlier. For medium onions, €33.50 is paid. Large onions of 60-80 mm come out at around €36 and jumbo onions at around €37.50. Especially the last two categories have become about €7.50 more expensive in a week. The switch from seed onions to sets can further increase the shortage in large sizes. This year, set onions contain quite a lot more large specimens and therefore fit well with, for example, British demand. In seed onions, by contrast, fewer large ones are found. For Central America, according to exporters, seed onions are currently desired. As a result, demand and availability are increasingly diverging by destination. Senegal is holding back exports for now On the sales side, Senegal is now the biggest uncertainty. Although the market there is not officially open yet, according to various exporters between 25,000 and 30,000 tonnes of Dutch onions are already on their way or present off the coast. As long as those volumes cannot be unloaded, there is little reason to adjust large quantities upward in the short term. That could mean that Dutch weekly exports will temporarily be lower. At the same time, local stocks in Senegal are shrinking and the last old onions are being traded. Once the border actually opens, the already shipped volume can be absorbed quickly. Traders mention 31 August or early September as possible dates when Senegal could become accessible again. That makes the situation different from a real drop in demand. A major part of the onions has already been sold or shipped, but is waiting for access to the market. That makes Senegal mainly a logistical brake on sales. Yield may be better than feared With total availability, yield remains an important uncertainty. The first impressions are somewhat less negative than a few weeks ago. Several traders mention yields of around or slightly above 40 tonnes per hectare. Traders and exporters generally assume a harvest of 1.2 to 1.3 million tonnes of seed onions. Regionally, however, the differences are large. In Groningen, Drenthe and Friesland, good plots are mentioned, while especially in the southwest and parts of Flevoland yields are disappointing. In Flevoland, there are also significant problems with fusarium again. Internationally, too, the picture is mixed. Northern Germany appears to be in relatively good shape and Eastern Europe has quite a lot of onions according to traders. In southern Germany and Austria, disappointments are expected. The reports about the British harvest are also not positive. The sales market can still absorb a higher price For the coming weeks, the market therefore revolves around two questions: how much product will actually become available after harvest and how many large onions will be among it? For now, sales seem sufficient to support the current price increase, but prices rising too quickly also pose a risk. Traders warn that the market must not get out of step with what export destinations can and want to pay. Still, the mood is firm for now. Part of the trade has secured sufficient stocks, but other parties still need to purchase. Especially for large onions, that buying need can support the price. In trade, a Packed Onions Benchmark Price of €50 around the turn of the year is already being discussed, although that is clearly an expectation and not a certainty. According to traders, slightly rising prices are helpful to keep sales moving.