According to Colin Galbraith from Moorhouse and Mohan, this is because, “At this time the main preoccupation with onions are those which are not in temperature controlled stores. There are also set onions which were allowed to grow on due to the late “summer”. This allowed the onions to grow very large but they will not keep well long term so need to be sold.”
A large percentage of UK onions are preordained to be sold to packing for supermarkets and these onions are not party to any price fluctuation, the same is true for those onions sold on contract for processing, therefore the amount of onions in a free market situation is relatively low.
“However this is tempered at this time when growers have to produce packing size onions and the number of onions they are producing over the supermarket specs are far higher than most would like and these have to come into the spot market,” explains Galbraith.
“This will change as the ambient are cleared and growers then go into cold stores which are drilled onions and they do not have the over sized ones in them. When that happens the trade will change and it will go from feast to famine.”
From a European perspective at this point there are considerable stocks of onions in Europe and they lack individual bulb size. Many, particularity Eastern Europe growers have misinterpreted the “signs” and think that all onions will be valuable and are sitting on their hands, according to Galbraith. “This is not the reality. Large onions will go short but there is a suspicion that anything under 70mm will eventually be a buyers’ market and prices will come away rapidly on smaller sizes whilst larger onions will gain premiums as stocks reduce rapidly.”
"There is a school of thought that onions will generally go short if export demand continues in Holland, but I am not sure whether this is more a hope than reality. I am not convinced that the trade is being talked up to hold pricing levels rather than there being a genuine shortage," continues Galbraith.
In terms of demand onions are a commodity, and at retail level are relatively non price sensitive. People use onions in meals and although the temperatures are relatively warm we are not basking in the sun and getting the barbecue out so consumption will not change much.
For more information:
C
olin GalbraithMoorhouse & Mohan
Tel: +44 1354 602860
Email: colin@moorhousemohan.co.uk
www.moorhouseandmohan.com