To United Kingdom
Currency risk biggest problem for onion export
The Dutch export of onions to the United Kingdom has recorded strong growth figures for the 2016-2017 season. Nevertheless, the negative consequences of a Brexit are looming. The sector fears currency risks most in onion exports. That says Gijsbrecht Gunter, chairman of the Holland Onion Association.
On Tuesday 19 July, the morning show of BNR news radio discussed the consequences of a Brexit for Dutch agriculture and horticulture. The Dutch business community will probably be hit harder by the departure of the British than is the case for other countries. That is the conclusion that ABN Amro draws, explained sector economist Nadia Menkveld.
14
procent
Exports are declining
The Netherlands currently exports 8% of the goods to the United Kingdom and 10% of the services. The agri and food sector plays an important role in this. Meat, flowers, fruit and therefore also onions. Due to a fall in the British pound, importing agricultural products is becoming more expensive for the islanders. The exchange rate is expected to weaken further next year, which will have a negative effect on exports, the bank believes.
Much more exported
Gijsbrecht Gunter, chairman of the Holland Onion Association, explains in the radio program what role the United Kingdom plays for the Dutch onion sector. That role has certainly been significant in the 2016-17 season. “We are closely following the developments around Brexit and have seen an increase in exports over the past season,” he explains. “30 to 40% more has been exported to the country. Good for a volume of 140.000 tons, which corresponds to 14% of the total exported volume of Dutch onions.”
According to Gunter, efficient and well-functioning logistics lines are essential for onion exports. The biggest risk, he calls the exchange rate of the pound. “Currency risk is our main concern.”
Invest in business relationships
According to Menkveld, there is also something positive to report. For example, the UK is far from self-sufficient. “They are to a very large extent dependent on the EU and in particular the Netherlands. This ensures that there is always a demand for Dutch products. Therefore, invest in a good relationship with the British.”
Niels van der Boom
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