“The prices are based on the EU market, but the exchange rate is making this very difficult, since the premium you have to pay for the onions does not justify the better quality,” explains Davey. “Apart from EU quality, the local grown short day brown onions during this period (September till December) has improved a lot over the last couple of years. Every year you will have to assess the prices and qualities in EU vs Local stock. I see the window of opportunity closing.”Dutoit tries to get the best quality product from Europe. Davey mentioned that the South African retail market is very strict on the cosmetic quality of onions, and the customers do not accept the water stains often found on EU onions.
There is no import ban in January when the South African season begins. Dutoit has already transitioned the early Western Cape onions into the market, with the rest following in January.
Davey relates his concerns about the current weather conditions, saying that “We have a drought in South Africa at the moment, predictions were that the onions would be smaller. We have had very dry growing conditions and water is running low.” However, they have seen the contrary in the fields. “The crops are growing very well, and we are expecting an above average yield and size on the onions,” says Davey.
In the coming season with the harsh weather conditions in the Northern Cape, the possibility of storing the onions may be compromised. “We suspect that the onions would rather be sold out earlier than be kept back for the later market due to the quality risk, so we expect an above average local price on onions in 2016. We also hope that the industry will export more product with the favourable exchange rate which will boost the local prices due to limited availability.”
For more information:
John DaveyDutoit Agri
Tel: +27 (0)23 313 3118
Email: john@dutoit.com
www.dutoit.com