Broad demand gives onion bag price the desired boost

The onion market is on the rise. Broad foreign demand means exporters can raise their prices weekly. Prices of large onions in particular are rising because supply of them is very limited. Vendors in distant destinations do notice that there is gradually some resistance beginning to emerge against the higher price level. That applies in some Asian destinations such as Malaysia. Customers are ordering a little less or skipping a week. According to some exporters, those customers are looking for alternatives such as onions from China. Sellers are using this signal to warn that the Netherlands should not price itself out of the market. On the other hand, there is good and broad demand. It is not only Africa that is driving things, there is also strong demand for Dutch onions in Central and South America. For example, there is considerable demand from Brazil for large onions. Côte d'Ivoire and Senegal are, as in previous years, the biggest customers. In that respect, it is at least good that Senegal has now opened its borders for imported onions. However, it is not yet the case that everything is running at full speed to get onions there. Before the market opened, a large volume was already waiting for access to the Senegalese market. In some cases, the quality of that volume leaves much to be desired because of the long wait for the border to open. The market there first has to digest those onions before new onions can be sent there again in large quantities. It is also a question how pricing will respond to that. New ship departs Next Tuesday, a new ship will depart from the Netherlands for Senegal, loaded by various exporters. This ship will also carry onions for Guinea-Bissau. That does show that imports into Senegal are being handled with a little caution. Meanwhile, containers are going there too. Those are smaller volumes that can be kept under control more easily. This year exporters are mainly trying to persuade their customers to take the 45-65 millimeter size. They are doing this because the onions are finer this year and there are relatively few onions larger than 65 millimeter. By offering the 45-65 size just a little more sharply than the normally most used 50-70 millimeter grading, they hope to create greater sales. For Senegal, both 50-70 and 45-65 millimeter are being loaded, while Guinea mainly asks for 45-65 millimeter. Especially 50-70 millimeter is in good demand. Many lots consist of 70% to 80% of this size. Several buyers have now switched to 45-65 millimeter because truly large onions are harder to find. Large onions scarce It is precisely in the larger grades that the most tension exists. Many onions now coming off the land remain stuck at a maximum of 60 to 65 millimeter and onions above 70 millimeter are scarce. Buyers who are really looking for large lots sometimes want a guarantee that, for example, 65% to 70% of the lot meets the desired large size. If that percentage is not reached, a discount follows. This translates into higher prices. For yellow onions, amounts of around 30 to 32 cents per kilo are mentioned at grower level when buyers are looking for a specific large product of good quality. Large red onions are selling for around 35 to 36 cents. The trend is cautiously upward. Especially for large produce, sellers are trying to make a little more every time. The bag price is also rising as a result. Even so, there is no sign of an overheated market. Supply and demand are fairly balanced and trade is moving along well. The market gets room now and then for an extra cent. For large onions the steps are bigger, because these onions are very limited in supply. Supers are even scarcer, which means several sellers do not have any offer for them. An indication of the price for these onions is 45 to 50 cents per kilo, but if you really want them and in larger quantities, that is difficult too. Yields are disappointing The market expects the Dutch harvest to be disappointing. In the southwest, an estimated 80% to 90% has now been lifted. Nationally, more than half of the onions are in. As the harvest progresses, more signals are emerging that yields are disappointing. That picture is not limited to the southwest and Flevoland. Lower yields are also being reported from Drenthe than had been expected beforehand. On many plots, it seems difficult to get a net 40 tons per hectare. Gross yields of 40 to 45 tons per hectare are mentioned regularly. Yields towards 70 tons are exceptional this season and are mainly reserved for plots with drip irrigation through hoses. Within plots, the variation is sometimes large. Good sections are alternated by very poor spots. As a result, even on seemingly good plots, the yield often falls short. One trader reports that for the harvest of 12 hectares he needed only fourteen loads of 35 to 36 tons for one of the, at first glance, better plots in Drenthe.