Onion supply fuels night candle scenario

This week the final touches are being made to loading the boat to Africa (Gambia, Mauritania and Guinea). This meant that at least some fine grades of onions could be shipped again. As a result, in some cases coarse batches were pushed back so that the coarseness of the batch could be better matched to demand.

Low bottom did not hold
In terms of price development, this week was another difficult week. The low bottom of the past week could not be maintained on the regional stock exchanges, causing onion price movements to trend downwards. Goes, Middenmeer and Emmeloord recorded lower prices for yellow seed onions than in the previous week. This concerns an average decrease of half a euro for the fine sorting and 1 euro for the coarse sorting.

When we compare the price development of the 60% coarse yellow seed onions with years in which there were also significant price movements in the last months of the season, it is striking that a decrease or increase is usually a one-off. There was only a recurrence in 2012, but that seems to be more the exception than the rule (see graph).

Does hope disappear?
It seems as if confidence is sinking even deeper than was the case with the previous price drop, that of week 15. Although the odds were even lower at that time, there was still a glimmer of hope to be discovered. Now that time is increasingly taking its toll, it is becoming increasingly difficult for the grower to take control of the market into their own hands.

This week in the southwest, 3 euros per 100 kilos were offered for a large batch of onions. The overview of Holland Onions Associations (HOA) makes it clear that such bids are the maximum for the moment. The traded volume, which the trade brought in in week 19, was 5.937 percent higher at 56 tons than in week 18. Prices fell by 40 percent to an average of 1,67 euros per 100 kilos.

Demand for coarseness is striking
In fact, the market seems to be heading towards the finish line in fits and starts. Brazil accounted for 17 percent of the export figure for week 40. Surrounding it is part of Africa and, to a small extent, a bit of Europe. The question about the size is striking. While coarse onions were a requested item, this now seems to be in favor of the finer grades.

These onions largely go to Africa. It is uncertain whether there will be additional demand for onions in view of Eid-al-Fitr. Inventories are kept quite short by the sorters. The warm weather and no longer believing in a revival ensures a greater supply.

The question is no longer how much money these onions will be charged for, but who will collect the onions. These elements together fuel the fizzle scenario.