Every week we look at an important country in the onion sector. In this edition we look at the second largest importing country of Dutch onions in the past year: Great Britain. Are exports to the UK as strong as last year and what are the consequences of Brexit?
The preliminary export figures show that 39 tons of onions have been exported to Great Britain this season (up to and including week 19.919). That is 45% less than a year earlier in the same period. This is a significant percentage less, for which several reasons can be identified.
Last season exceptionally good
An important reason is that exports to Great Britain were exceptionally good last year. In the 2016/2017 season, 141.000 tons of onions were exported to Great Britain. That is more than a third more than the 2 seasons earlier (101.000 tons in 2015/2016 and 102.000 tons in 2014/2015). An important cause of the good last season is that the quality of the Dutch onion was very good. In addition, many British growers have miscalculated. They waited too long to sell their onions, but then the sales opportunities turned out to be very limited. Due to last season's problems, British growers are currently much more likely to sell their onions.
The quality of British onions is less good this year than last season. Because British growers mainly grow for supermarkets and small packers, there are more parties that do not end up in the small pack channel. These do enter the channel of Dutch trade.
Brexit
When the British voted in a referendum on Brexit in June 2016, there was a lot of uncertainty about the consequences. Negotiations are still ongoing and no one knows which form of Brexit is coming our way.
It has become clear that Brexit has had an impact on the exchange rate of the British pound. The pound has fallen 18% in the past 20 months. This makes the import of onions more expensive for the British and the British grower has become more competitive for the Dutch growers.
Course of this season
Dutch exporters expect that fewer onions will be exported to Great Britain this year. For the reasons mentioned above, British growers have become a lot more competitive for Dutch growers. In addition, British packers have implemented many technical innovations, making them increasingly similar to Dutch packers.
Great Britain has 60.800.000 million inhabitants and is 5 times the size of the Netherlands (209.331 square kilometres).