After a difficult onion season with some of the lowest prices in years, principally in response to a high onion supply, the 2017/18 season looks set to be “very interesting”, a market agent says, marked by shortages and correspondingly high prices. There is even talk of record prices until September next year. One grower predicts “rockbottom” prices a year from now: “Everyone will be planting too much after the good prices and prices will plummet next October.”
It is generally agreed that onions will be in shorter supply in South Africa the coming months, but opinions differ on when the shortage will start manifesting itself. Some in the industry expect it to be felt from January onwards, but others believe that volumes will be fine until March or April, as long as volumes from Ceres, second largest production region, hold. However, onion prices have doubled over the past week because the shortage is already here, one major producer says.
A hail storm last week affecting substantial acreage of onions around Christiana – volumes that were due to go to market over the coming two months – will further accentuate the shortage.
Current onion supply on the fresh produce markets (this time of year mostly from Limpopo and Brits) are roughly 700,000 x 10kg bags lower this year than last (2.1 million versus 2.8 million x 10kg bags). FreshPlaza was told that northern volumes are down after a reduced growing season (late planting as a result of the very dry summer) and lower volumes from Brits due to quality problems. A large amount of onions was marketed simultaneously during late August and September, pushing down prices; farmers need to market their onions before the summer rains start as well as to clear harvesting and packhouse capacity for potatoes.
Prices have already started rising, a welcome change to the poor onion prices of the past season. Prices so poor, in fact, that some producers were unable to recoup their production costs, a situation compounded for growers in the central and northern parts of the country by weak potato and maize (corn) prices. (South Africa has recorded its largest maize harvest in history this season.)
In the important onion production region of Ceres, where the acreage under onions has been a stable 3,000ha for the past few years, significantly fewer onions were planted this season. Pieter du Toit, chairperson of Korkom (the onion and potato growers’ organisation of Ceres) says that it’s not certain exactly how much less was planted, but the harvest will definitely be down. Thys Steenkamp of Donkerbos told FreshPlaza that they currently stood at only 30% of their usual planting due to water constraints; late rain in this coming month could facilitate more planting. There are even reports of some onion producers who have decided to forego onions completely this season, to rather focus their limited water resources on their permanent fruit crops.
In anticipation of a shortage some farmers in other parts of the Western Cape like Bonnievale and Tulbagh have planted extra, but it probably won’t make up for the Koue Bokkeveld’s lower volumes which reach the market from mid-January through to autumn, volumes permitting.
The Northern Cape delivers the strongest volumes during January and February but opinions differ as to what can be expected, volume-wise. Louis de Kock of Wildeklawer in Barkly West says that the region’s recent planting was one of the smallest in years in response to the poor prices received for the past two or three years. Many onion growers have replaced onions with wheat.
Kolver Mülke, who farms between Kimberley and Douglas, says: “People talk about high prices expected for onions this season, but one should remember that the past season you saw an average of R23 [1.43 euro] for a 10kg bag, which is below our input price. Many onion producers made a loss on onions this past season. The potato price was very low, the maize [corn] price was low – we need higher onion prices to stay on our farms.”
Onion volumes from the Brits area are down: during planting time in February heavy and prolonged rainfall disrupted onion plantings and the disease load was heavy. The onion season in Brits is called one of the worst in years.
Volumes from this dominant onion production region will be only slightly lower than last year, reports Cobus Vorster of the Noordelike Uiekomitee. This time of the year the region has close to 100% of market share, dropping towards the middle of October, when the Northern Cape comes onto the market.
Jaco Oosthuizen, group managing director of the RSA Group, one of South Africa’s largest market agencies, says that expectations are that northern volumes might run out after an early start to the season, due to high early summer temperatures, leaving gaps in supply.
“There could be some opportunistic planting out of season to capitalise on the shortfall,” he says. “The feeling is that we’re definitely looking at shortages. It could be a very interesting time for onions.”
For more information:
Pieter du Toit
Tel: +27 21 313 3118
Tel: +27 21 317 0838
Louis de Kock
Tel: +27 15 531 9700
Tel: +27 82 411 0196
Tel: +27 79 623 7793