The previous month, the onion market displayed a relatively quiet view. A stable but still high price level, broad sales with large volumes and a quality that’s generally good. The positive mood hasn’t led to the market overheating so far. While the sorting companies still have limited storage, they seem to spread out purchases over a somewhat longer period rather than playing things very tightly with very small margins, like in previous seasons.
Most companies have been able to make some money again in the past months, and growers aren’t complaining with prices for class I quality, including GlobalGAP, increasing up to no less than 20 cents. For the bottom of the quality market, incidentally, at the same time no more than 14 cents is paid, and some shipments that aren’t suitable for the Dutch market quality-wise, are sold for 8 cents to countries like Poland. Bale prices were between 19 and 25 cents, depending on the quality and the size. Quality is a subject that’s been coming into the picture again and again in recent years, and so clearly translates to price level as well. After all, a difference of 12 cents gives every grower food for thought. It’s also one of the most important trumps with which the Netherlands can stand out in the international market where they take up an export share of 15-20 percent.
Senegal
Although sales are very broad, it mainly focuses on West Africa. When Senegal will close its borders soon, other destinations will have to take over this main market. Last season, Senegal accounted for about 140,000 tonnes of export. In the second half, other destinations took over the export, including Brazil with 105,000 tonnes. But also other smaller markets like Indonesia, Panama, US, Libya, Tunisia, UAE, Singapore, Thailand, Vietnam, etc. Together, these destinations accounted for over 150,000 tonnes of export in the second half of the season, saving the Netherlands from the Russian boycott which continues this season as well, and at the moment it’s still unclear whether the alternative destinations will again line up for Dutch onions.
Steady export growth
In absolute figures, the Dutch export market is growing steadily, with around 5% volume increase per year, but the proportions in sales opportunities are indeed shifting. So anyone going onto the onion market needs to continuously pay attention. Incidentally, further growth is expected on Asian destinations in the coming years. In China, although not an absolute frontrunner in terms of global production, cultivation is becoming increasingly expensive due to rising wages and because the agriculture sector – which is under pressure because more and more people are leaving for the city – isn’t organized optimally. Relatively small plots, a lack of sufficient fresh water for irrigation, short-day onion varieties that don’t store well, more diseases and bad infrastructure in the countryside mean China is unable to keep up with the increasing demand for onions, and even the domestic demand could come under pressure. Garlic is a product that does better in China, at the expense of the onion production. The same goes for neighbouring India, more or less. So it is an opportunity that the latter onion market is now open to Dutch onions, despite it also being a fierce competitor for the Netherlands, being a mega exporter. Both countries together have a population of 2.6 billion people. With an average consumption of 15-20 kilos per capita, that make an annual consumptive volume of 40 to 50 million tonnes, or about 35 times the entire Dutch production. The US and Indonesia come next on the list with highest number of inhabitants, with a “mere” 319 and 254 million inhabitants respectively. These are also both countries where the Netherlands gained a foothold in the past year.