Onion prices are currently hovering around €50 per 100 kilos again. The last time the onion price crossed this threshold was in 2023 and before that in 2019. Both years saw incidents that created a lot of mood in the market. What do previous years of high prices tell us now and what are the expectations for the rest of the storage season?
In 2018, there was extreme drought, which drove up prices considerably during the storage season. In 2023, prices rose again to great heights, partly due to the high global raw material prices that year and also good export demand. This year, it is quality problems that unexpectedly give a lot of sentiment in the second half of the storage season. In addition, the export demand is again causing a price-raising effect.
If you look at the export figures in years with high prices, you get a picture of the demand. But these figures are not always leading in themselves. There are simply too many variables for that, such as yield, quality, the sown area and the final harvest estimate. All of these play a role in pricing. None of these factors on their own is sufficient to draw firm conclusions about price developments, because market forces are simply a combination of factors. It can be said that years with high prices always have an identifiable cause if you look at harvest years 2018 and 2022.
Drought decimated harvest in 2018
Lower export figures on paper do not necessarily have to stand in the way of high prices. In 2019, total onion exports from the Netherlands fell by 15% to around 500.000 tonnes. African demand was strong at the time. Demand from countries such as Senegal, Egypt and Nigeria in particular rose by more than 2019% in 10. This fuelled the price increase, despite the lower total export volume. In addition, there were simply too few onions available to be able to export at all. In 2018, the onion harvest fell by 40% to 887.000 tonnes, the lowest level in years. Not so much demand, but especially the tight supply was the leading factor for the high prices that year.
Good demand and commodity frenzy in 2023
In 2023, the high prices were more a combination of supply and demand. The onion yield in 2022 had fallen by 17% to 1,21 million tonnes, the lowest level since 2018. In addition, demand was strong. The total Dutch onion export in 2023 amounted to 540.000 tonnes, an increase of 8% compared to the previous year. African countries such as Nigeria, Senegal and Egypt had a great need for onions, partly due to population growth and urbanisation. This led to an export growth of 10% compared to 2022. At the same time, South Africa struggled with poor harvests due to drought and extreme weather conditions, which increased its dependence on European imports. Within Europe, the demand for onions also increased. In addition, the price crisis on the raw material markets played a significant role. The war in Ukraine caused many raw material prices to drift and this also created a mood on the onion market, partly due to higher prices for alternative vegetables.
Quality issues cause price increase 2025
This year, it is not so much supply or demand, but quality problems in storage that are causing onion prices to rise considerably. With a final harvest estimate of 1,49 million tonnes – the highest since 2011 – it was initially not expected that prices would be high, but nothing could be further from the truth. Quality problems in Europe have affected the situation to such an extent that the demand for good quality onions has increased enormously in recent times. The price for good quality onions has now risen to €50 per 100 kilos, according to transactions completed. These levels have certainly not yet been reached on the regional stock exchanges, but there is also a strong increase.
Initially, €50 was paid for onions of good size, but now the market is saying that the quality of the batch is leading. Eastern Europe – especially Poland – is also pulling strongly on the market. Traders report that this is clearly putting a bottom on the market: prices are circulating where gross for net is delivered to Poland for around €35 per 100 kilos. According to insiders, this is no longer possible for the Dutch trade in terms of quality. Moreover, the stock is exceptionally low. It is therefore questionable whether the end of the sales season will be reached with the onions that are still available. Some of the batches that do not meet the quality standards are now being sold outside the official channels in Eastern Europe. This does not exactly increase the supply.
Expectations for the remainder of the season
The onion season usually runs until mid-June. This means that there are still several weeks to go, during which prices can rise further. With the ease that prices recently rose to €50 the market could possibly also rise to €60. A survey among traders shows that not everyone actually sees this happening. According to a trader, import prices fluctuate between €48 and €60. Based on this, there would not be much room for further price increases at the farm. Other traders still see room for higher prices. For this, the domestic market is explicitly pointed out. Supermarkets may be prepared to pay a higher premium in order to get their hands on the still scarce supply of Dutch onions and thus meet the consumer's wishes, according to the market.
Based on previous years with high prices, it can go either way. In 2019, prices continued to rise until the last week of the season. In 2023, sentiment turned and the market dropped back somewhat in the final phase. For the time being, there is no reason to think that this last scenario will repeat itself this year. In contrast to 2023, the market is less influenced by the outside world in the form of volatile commodity prices. This year, the market is doing more on its own and, in addition, there are hardly any good quality onions available. In addition, the export figures has been highly regarded for weeks.
In any case, it can already be concluded that the long-term holder will not be disappointed this year, regardless of further price increases.