Dutch onion exporters had to deal with an import quota for Senegal for the first time last season. The local government wanted to protect the local market in this way. Exporters are now eager to ship large volumes to the country again this season. The country has now announced that it will also work with quotas this season.
This article has been updated with new information.
The opening of the border for Dutch onions in Senegal, op Monday 14 August, did not cause any major surprises within the onion sector. The first shipments left for Africa at the end of last week. "Exporters have anticipated the news. Compared to 2016, it is 6 days earlier, but relatively speaking it is not too bad," says Wim Waterman of Waterman Onions. "Everyone obviously wants to be the first to arrive in Senegal with onions."
Import quota passed successfully
Waterman is convinced that an import quota will also be set up in the 2017-2018 season: "The quota was a success last season. The exact implementation is still unknown, but I do expect that we will have to deal with it again. When the market onions is flooded, then the government intervenes." However, Waterman is under no illusion that this will cause the Dutch onion sector to slow down. "There is maximum export, especially in the first half of the season. It may decrease later."
Licenses
The quota works with licenses issued by the government. The local importers are assigned a license. Every importer has relationships with 2 to 3 Dutch suppliers, where he gets his onions from. Last year The quota was set retroactively from November 1. As a result, weekly exports were reduced by approximately 2.000 tons.
Watch coffee grounds
Not everyone is convinced that Senegal will regulate imports again. William Nannes, buyer at JP Beemsterboer Food Traders, dared there earlier no definitive answer to be given. According to him, the quota was partly responsible for the local onion market in Senegal last year. Whether measures will be taken again in the 2017-2018 season remains to be seen.
Guinea market ruined
Last season, Guinea, a major destination for triplets, was flooded with this product. The sector is still reaping the bitter fruits of this. The sale of these triplets is currently a problem for processors. "There are many triplets in onion sets this season and we also see them in the first sowing onions," says Waterman. "The market in Guinea has been ruined. I dare not say whether the market in Senegal and other African countries has also been ruined. There is no similarity with Guinea. No one can say exactly how things will turn out."
Last season, Ivory Coast was also oversupplied with onions, causing the country to take a step back. This caused destabilization in the market.
Update August 17, 15:30 PM
Visualizing imports
The Senegalese Agence de Régulation des Marchés, the government organization that oversees market regulation, indeed announced on August 17 that it will work with a monthly import quota. To start with, it will register the quantity of onions that enter the country. Once this has been identified, an import quota can be set. No statements have yet been made about volumes.
Rising costs
Onion prices have risen sharply in Senegal. 1 kilo currently costs €0,91 to €1,07 on the market. This is reported by the Senegalese consumer association UNCS. According to the ARM agency, the available stock has decreased from 1.775 to 424 tons.
In view of the Tabaski festival, Senegal welcomes imported onions again. The consumer association advocates setting a price ceiling for the ARM. However, Chairman Mamadou Abdoul Sy is not in favor of this. The association fears sharply rising prices. Since everyone wants to buy onions for Tabaski, buyers are forced to incur unnecessary costs.
Low local yield
According to Mamadou Abdoul Sy, the country is self-sufficient in onions. The problem, however, is that there is not enough storage available. This causes major losses. The current onion season in Senegal has a low yield, he tells a Senegalese news site. This is because too little fertilizer has been used. Growers also talk about poor seed quality.
Import is a problem
Onion cultivation in Senegal is growing rapidly. In 2004, 40.000 tons were produced, compared to 367.000 tons in 2016. Onion sales achieved a turnover of 35 billion CFA Francs. Sales are a problem, according to Trade Minister Alioune Sarr. "This is difficult, especially at the beginning of the season. That is why we have to regulate imports."