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Argentina loses its share on the global onion market

Argentina is struggling as an onion export country. Ten years ago,  the country was still exporting 80% of its onions to Brazil and Europe. Now that figure lies at 30%. The reasons? Argentina's faltering economy, climate change, soil diseases, and logistical challenges. There is, however, a light at the end of the tunnel for the Argentinian onion.

Argentina has two types of onions - the mid-day (intermediary) and the short-day onion, says Pieter Dekker of Bejo in Argentina. In the south of the Buenos Aires province lies 8,000 hectares of intermediary onions. In the west (Rio Negro), 2,500 hectares.

More to the north, in the provinces of Salta and Santiago del Estero, there are about 3,500 hectares of short-day onions. Intermediary onions are sown in August and harvested in January/February. The short-day onions get going in October. This means Argentina can deliver onions year round.

Economic problems
Yet, Argentina is not competitive in the global onion market. The country lost Europe as an export country ten years ago. Argentinian onions have also lost much of the market in Brazil. Dekker says, "Argentina has major economic problems. For example, the Argentinian peso has lost 50% of its value in the last six months."

Climate change is another problem. Ten years ago, Southern Argentina was an arid area with little rainfall. "In recent years we have seen more rain and heavy storms", says Dekker. “Here, onions are stored on the land under plastic. If the onions are grubbed up in wet conditions, have to dry on the lands, and then have to be stored in this way, it can be at the expense of their quality. There are no storage facilities like in the Netherlands."

Soil diseases such as fusarium and pinkroot also pose challenges.

Difference in cost prices
Brazil demands onions mostly in June and July. It is self-sufficient for the rest of the year. Besides buying from Argentina, Brazil also turns to the Netherlands for its onions in those months. “The Netherlands is, in itself, competitive", explains Dekker.

“Cultivation in Argentina is largely still done by hand. Cost prices here are considerably higher than in an export country such as the Netherlands. In Argentina, for the top growers with drip irrigation, this price lies at EUR6,000-7,000/ha. For Dutch growers with storage capacity, it is at EUR5,500-6,000/ha."

"The price of renting a hectare of land in the Netherlands is substantially higher than in Argentina. Here, a farmer can buy land for less than EUR2.000/ha”, continues Dekker. The average yield in the Netherlands is much higher - an average of 40 tons in Argentina versus 60 tons in the Netherlands.

And then there is logistics. According to Dekker, the Dutch can still send cheaper onions from the port of Rotterdam to Sao Paolo than the Argentinians can send a truckload from the south of Buenos Aires to that Brazilian metropolis. "But, there are logistical projects being developed in the Argentinian port of Bahia Blanca. Then onions will be able to be transported by boat."

Hybrid breeds
There is, however, a light at the end of the tunnel. There is a lot of mechanization going on in Argentina. The demand for hybrid varieties is also increasing. In the past, there was a preference for seeded only varieties. Now, the volume of hybrids on the market is at ten percent.

"There is still a lot of work to be done here", says Dekker. "Seed companies such as Bejo/De Groot en Slot are focusing on breeding specific varieties for the Argentinian market. We are working on intermediary varieties that are suitable for the 38th to 42nd latitude."

"These will be able to be stored well, have a good root system, and will be resistant to fusarium. And with a lot of colors - Brazilians are crazy about the bronze color of Argentian onions”, he continues.

Almost every grower in Argentina currently has a pneumatic sowing machine. This ensures better sowing and that the onions can grow out better. Irrigation used to be done primarily by traditional irrigation methods. Now, drip irrigation is becoming more popular.

“These techniques can increase yields. This means the cost price will be reduced by being able to harvest large volumes per hectare. That will strengthen the Argentinian onion's competitive edge", concludes Dekker.

Source: De Groot en Slot

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