Spain, like most European countries producing onions, has been forced to deal with this year's huge production, which is keeping the markets oversupplied. The new harvest has clashed with the abundant onion stocks still available from last season and this has caused prices to plummet; so much so, that early onion prices have fallen below production costs.
According to the Association of Onion Producers of Castile-La Mancha, PROCECAM, the acreage devoted to early onions has increased notably in Spain. This onion is mainly intended for the domestic market.
The opposite is true for storage onions, whose acreage has been reduced this year ahead of a dreaded overproduction. Furthermore, the heat wave that has been hitting Spain for two more weeks is very likely to affect the yields of storage onions, so a much lower supply is expected at the end of the season.
Given this situation, Spanish exporters can benefit from the sale of large onions, since Europe only has plenty of medium and low calibres, and large sizes are the most demanded, especially by the peeling and processing industry and the catering sector. The price difference between medium and large calibres will thus be considerable.