"Absurd" is how Carl van de Wiel of Agro Center Holland describes the red onion season. "We saw it coming to some extent. Fewer red onions were planted across Europe, and the quality was lacking in many areas. That led to sky-high prices," he begins. Yet, this Dutch onion trader, specializing in red onions from the start, is not overjoyed.
"You can make a profit on the onions you have in stock, but in the long term, this situation is unsustainable. There's currently plenty of resistance from customers, which greatly reduces sales. Red onions are offered overseas at significantly lower prices, and some countries have simply stopped ordering."
Receipt on the VTA of €1.20
According to Carl, prices in the Netherlands remain high mainly due to speculators he believes have no business in the market. "Last week, there was a receipt on the VTA for €1.20. That speculator thought he could price his stock up, and the rest would follow. How naive," he reckons.
"They benefit from driving up prices, which the growers then use as leverage. In the short term, that may seem favorable, but I fear frustrated buyers will increasingly start avoiding the Netherlands. That greatly concerns me." And in Carl's experience, onions never truly run out. "There's always supply on the market. Many growers have sold to speculators, so the harvest has seemingly been sold, only to hit the market a second time," he says.
"And now, imported onions are arriving in full force. Red onions from Tasmania, Chile, Peru, Argentina, New Zealand, and even Senegal are heading this way. They offer newly harvested onions, ready for the European market, at €0.90 and less. Local farmers still think they can make a euro, on which we traders must then make a profit. Most packers probably won't be buying much more, either. With lower volumes on the market, you have to make more money on every load to achieve the same results. That's currently making for many frustrated clients. You now see German discounters simply not selling red onions anymore."
New Peruvian onion crop
"I got my first onions from Peru last Friday. It's a beautiful new harvest, which we sell for €1 per kilo. Egypt has also planted a tremendous amount and even started planting a month earlier than usual. That doesn't mean the onions will hit the market a month earlier; they should arrive by mid-April. Then, the market pressure will quickly dissipate," notes the onion trader.
Buyers seek alternatives
"India has already lifted their white onion export ban and is expected to open up red onion exports at any moment. There, local market prices are currently at around €0.20/kg. They won't immediately serve the Dutch market - it's a different type of onion - but they'll send red onions to our traditional markets once exports open up. Customers are noticeably looking for new avenues. China was already much in the market this year, and many orders are also being placed in France for the upcoming season. Clients are increasingly looking for alternatives and avoiding the Netherlands."
"A lot has been sown overseas, and the Dutch red onion acreage will likely increase again next season. You can't grow red onions everywhere, though." Compared to the red onion market, this year's shallot market is somewhat dull. Anyone with sales channels can easily sell their shallots, but there's little extra demand," Carl concludes.
For more information:
Carl van de Wiel
Agro Centre Holland BV
8 Neerhof Street
4761 BM, Zevenbergen, The Netherlands
Tel.: +31 (0) 168 371 230
info@red-onion.com
www.red-onion.com