Gijsbrecht Gunter is from the Holland Onion Association in the Netherlands. He has noticed an increase in onion sales. This is due to the coronavirus outbreak. He has, however, also seen the problems this poses for the onion trade sector. "Some companies work a lot with hired help. These businesses are faced with understaffing."
"That is because a lot of their workers are from other countries, such as Poland and Romania. Last week, these people went home. There is, therefore, a lower processing capacity at some places. But, logistics, both on land and sea, is currently the biggest headache. There are fewer drivers, which is making transport far more challenging. It will soon, probably, become more expensive too."
"One should make a distinction between three markets when it comes to sales. There is the Netherlands (5-10%), Europe (25-30%), and exports (60-70%). In the Dutch market, we see that people are hoarding onions. Onions are very healthy and store well. They go well with pasta, which is also being stockpiled. In short, these different factors explain the climbing demand. It might well be a temporary effect. One cannot rule out a setback in a few weeks or months," says Gijsbrecht.
"Some companies, which supply supermarkets, can sometimes barely keep up with demand. These businesses often arrange transportation directly with the supermarket. That is, therefore, not a major issue. Hotels and restaurants are not demanding any onions at the moment. They are all closed. But they form a fairly small segment with regard to total sales."
"There is a considerably higher-than-normal demand in Europe too. Many overseas processors are closed, especially in Eastern Europe. That demand has, therefore, shifted to Dutch processing companies. So, those supplying the Dutch and European markets have plenty of work. The biggest risk remains the uncertainty around regulations. What measures will countries be taking in the coming days and weeks? Closing borders will bring export opportunities to a standstill," explains Gunter.
"At present, most Dutch onion exports, by far, are aimed at third countries. Dutch onions go to 140 destinations worldwide all year long. The demand from the rest of the world is not much different than usual. We did, however, have the most exports ever this season. But this was due to factors other than the coronavirus pandemic."
"The increased demand, such as in the Netherlands and EU, is not noticeable in other parts of the world. Some people reckon there is more demand from Africa. But that is rather due to Ramadan, which starts in April, than the coronavirus," continues the chairman of the Holland Onion Association.
"Much, however, remains unknown about the spread of this virus outside of Europe. It is also not clear what measures these countries might take. Take (West) Africa, for example. They take a lot of onions. There, the first Covid-19 cases have only recently been reported. The virus broke out in China in mid-January."
"Then, the number of available (reefer) containers decreased. This resulted in a challenge to get enough containers packed. These factors, and the increasing European demand, ultimately led to higher onion prices. This is inhibiting export demand from distant countries," concludes Gijsbrecht.