Difficulty in competing with other exporters to the EU

Better season ahead for South African onion exports

Last year about 38 million 10kg bags of onions were sold on South African local markets. Of this number, 9.4 million bags originated from the Koue Bokkeveld (Ceres region in the Western Cape), 9.9 million bags from the Northern Cape while the Northern region (the Northwest as well as Limpopo Provinces) is responsible for roughly half of South Africa’s onions, with more than 16 million bags delivered to national markets during 2016. These figures exclude onions delivered directly to supermarket groups such as Freshmark (for Shoprite Checkers) and Woolworths.

Northern producers expect that 2017 will be a normal production year because of good rains during the latter part of the summer, while production estimates for the Ceres region are up with almost 3 million 10 kg bags. Much of South Africa’s onion production occurs at high altitude, 1 000m and more above sea level.


Copyright: Korkom
 
Of these production areas, only the Western Cape exports onions because it produces brown onions, intermediate-day varieties, which have a longer shelf life than white onions. Between 2011 and 2012 exports to the European Union dropped dramatically (from 549 947 to 39 235 10 kg bags) because South African producers were unable to compete with European growers who receive government subsidies, coupled with rising input costs in dollars and a weakening Rand. Last year, according to the Ceres onion producers organisation Korkom, 4 145 896 bags were exported to the EU (although this figure also includes onions marketed directly to South African supermarkets). The figure is estimated to rise by about a million bags this year.

South African growers are also competing with onions from Egypt and India which, especially the former, are closer to the EU market.


Therefore Western Cape onion exports have increasingly focused on African export markets, particularly Angola, which amounted to 2 266 465 bags (10kg) in 2016. As with all other agricultural exports, these have decreased somewhat over the past few years due to a weaker oil price. South African onions are transported by road to Angola and reach the capital, Luanda, within three days.

Other Southern African countries are also serviced by the South African onion industry, although exact figures are not available, because such trade occurs on an individual basis at South African fresh produce markets (particularly at the Johannesburg Fresh Produce Market).

South Africa is not the only onion producer in the region: Namibia also produces onions and as part of a special potato and onion scheme, closes its borders to South African onions when in production, which starts about mid-July and runs to October. According to the Namibian Agronomic Board, “the Special Potato and Onion Scheme makes provision for all importing retailers, wholesalers and caterers to purchase all their potato and onion needs from local producers. Only once the local supply of potatoes and onions are exhausted, will import permits for potatoes and onions be issued to satisfy consumer demand.”
 
The Namibian season overlaps with the onion season in the northern part of South Africa (which is situated on approximately the same latitude) and onions from there are sent in substantial quantities to the Cape Town Fresh Produce Market, apart from smaller onions going north to Angola. A market agent at the Cape Town market told FreshPlaza that the arrival of Namibian onions on the market depresses the price of South African onions.


Copyright: Korkom

Domestic onions prices are under pressure as it is: currently onion prices are about 30% lower than last year this time due to ample supply. There is on average a 35 to 40% price difference between Western Cape onions and the white, short-day onions produced in the northern production areas. According to a market agent at the Tshwane market: “Cape onions are beautiful.”

Cobus Vorster of the Northern Onion Committee refers to a dramatic increase in the quality as well as yield of short-day onions planted in the north, due to improved cultivars. “We have seen yield improve from 30t/ha to 50t/ha and the shelf life is much better than 10-15 years ago.” Northern onion growers are in the favourable position that they have large tracts of land available for crop rotation on a four to five year cycle, thus avoiding soil-borne diseases like Aspergillus niger (black mould of onions).



Furthermore, South Africa is an onion seed producer, with a number of companies multiplying onion seed on contract for producers from as far afield as the Philippines and Japan, the Netherlands, India, North and South America as well as for the Southern African market. “The past year was a very good year for us as it was dry, with fewer wildflowers, so we had very good bee pollination,” says Pieter Burger, production manager for Klein Karoo Seed Production. Onion seed production is done in the drier, winter rainfall areas of the Cape as they want no rain during pollination nor during the harvest.

For more information:
Suretha Deetlefs
Korkom (Ceres Potatoes and Onions Committee)
Tel: +27 23 316 1230

Cobus Vorster
Noordelike Uiekomitee
Tel: +27 14 717 1194
Email: noorduie.komitee@senco.co.za

Pieter Burger
Klein Karoo Seed Production
Tel: +27 44 203 5259

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