The CEO of KeyPerú, Miguel Ognio Gomez, stated that Peruvian exports of sweet onion in the 2014/2015 campaign, which began in August 2014 and finishes at the end of this month, could amount to 135,000 tons (5,000 containers of 27 tons each) and generate revenues of US $50 million.
He also stated that prices had declined significantly in this season due to the overproduction of this type of onion in Peru.
"Our country planted about 3,500 acres of sweet onions this season, when we normally plant between 2,500 and 3,000 hectares," he said.
In addition to the high domestic production, some US producers -the main market for Peruvian sweet onions to which they send 80% of their shipments- managed to delay their production and competed in the same window as the Peruvian producers, so there was an excess of onions in the market.
Ognio Gomez stated that there has also been a reduction in the consumption of sweet onions in the United States because of its high prices, so the traditional spicy onion has replaced it.
"America is a large producer of spicy onion and mainly exports it to Central America. However that destination was packed with onions from Europe, so there were a lot of onions that were not exported and were sold in the US market."
According to Ognio, the Peruvian shipments were disorganized and there were weeks in which one exporter dispatched about 100 containers to a port, which distorted the market.
He said that the estimated 135,000 tons of sweet onions exported in the campaign that is about to end, represent about 50% of the country's production, and that the other half of the production had stayed on the farms because the selling prices were very low.
"If you take a tour in the north or in Ica, where the crop areas are, you will see mountains of sweet onions lying about, fields un-harvested, or buried crops."
KeyPeru's participation
The general manager of KeyPeru said his company had exported about 20,250 tons of sweet onions this season, representing 15% of the national supply. The main destination markets were the United States and some European countries.
He said KeyPerú has about 400 acres of sweet onion and that they currently don't plan to increase their production area because there are many participants in the business. "There were about 70 companies involved in the export of sweet onions in the current season."
Forecast for the 2015/2016 campaign
Regarding the next season, which starts in early August this year, Miguel Ognio recommended growers plant the amount that the customers have committed to buying and not to speculate in order to avoid the problems there have been in the current season.
"There are producers planting 600 hectares. That's too much because it distorts the market. They must be more measured in their export program."
Regarding the possibility of sending sweet onions to other markets, he said it would take a long time because they had to introduce a new concept in those markets, eating sweet or soft onions, which required much time and investment.
"It is not about seeking opportunities in countries where there are shortages and seeing how that works out, that's not helpful. We must work on the concept of consuming sweet onions and reach those markets with this product that is a delicatessen, it is a special product, unlike any onion, as it is more difficult to produce, it's more perishable, has different characteristics, and a different price," he concluded.
Source: Agraria