In a matter of days, the onion price shot to unprecedented heights. The prices quoted, sometimes purely speculative, are out of reach for many growers. The quality and sorting dictate the price tag. In addition, the group of growers with freely available products is declining rapidly. This raises the question: how many free onions are still for sale?
Revenue figures from statistics agency CBS estimate the gross seed onion harvest for this year at 811.392 tons, good for a hectare yield of 32 tons. After publication, insiders said that a reduction of 44%, compared to the 2017 harvest, was probably on the positive side. The calculation is based on 50% or more.
onion harvest
When the exported and processed volume of onion sets is taken into account, the acreage of which is significant this year increased (+17% to 9.140 hectares), approximately 2018 net tonnes of product is expected to be exportable for 2019/825.000. This is evident from calculations in the Boerenbusiness onion analysis is explained. The high tare percentage and large share of undersize are also taken into account.
Up to and including week 46, the total onion export amounts to 447.000 tons, with a weekly average of 22.300 tons. This means that about 50% of the onions from the Netherlands have already left the country's borders. If you extend the weekly average, this means that around 2018% will have been loaded at the end of 75.
It is difficult to make a statement about the further course of events. Insiders estimate that exporters will ship the last onions in April (until early May at the latest). It is noted that the average export volume achieved is not maintained. The normally oversupplied Senegalese quota remains partly unanswered this year.
Higher bale prices
After hectic weeks at the market Peace has returned (for now). Buyers have paid a lot of money to get their hands on onions. This was possible because bale prices had risen sharply. Between week 44 and week 48, depending on the sorting, up to €20 per 100 kilos was added. Only when bale prices take a new step will the grower's price increase, but then there must be sufficient onions.
Inquiries with insiders show that the estimate of the volume still available for sale is 20% of the net harvest. This amounts to 165.000 tons (December 1). In addition to the stocks that commission agents, sorters and exporters hold, there is a trump card in play this season: the speculators. It is guesswork how large the volume is at their disposal. Tonnages of up to 100.000 tons are mentioned here and there, but 50.000 tons seems more in the right direction.
The majority of these parties do not yet have a buyer. The speculators have taken advantage of the exceptional market and obtained beautiful lots (large and quality with dormancy) at an early stage. The 'death or gladiolus strategy' has been most commonly applied. They are not moving because of the current market situation and the associated prices of €50 to a maximum of €60 per 100 kilos in the long term.
For the time being, growers are still looking up, with the average stock exchange quotation for large onions increasing from €3 to €32,50 per 46 kilos in 100 weeks. The question is what the reaction will be when the price slows down and drops to €40 or lower. Does this create more supply? In addition, there is also more forced supply, as a result of quality problems in batches that previously seemed good.
Height of VTA figures
Growers' association VTA will probably publish its first stock inventory among its members at the end of December. Earlier this year it published a 30% lower yield (average), with 20% less 60 millimeters uphill in the plots sampled. That 30% was based on the trial harvest figures, after which not all plots were harvested.
With the CBS figures in mind, VTA has made a major correction. The question is what the inventory percentage amounts to. In 2017, 33% had been delivered by the end of December and 20% of the remaining stock had been sold. Most likely less than 20% will still be for sale this year.
If the market slows down and the price falls, supply may come from speculators and from growers who have doubts about the shelf life. This creates opportunities for long-term custodians, although a higher price level must be bearable by buyers. If there is a new buying wave, as has been seen in recent weeks, it will probably become more difficult to get your hands on onions, unless quality (or the lack thereof) starts to dictate the sales position.
Onion sector proverb
The onion sector has its own proverb: Beware of what is not there. In other words; In times of shortage it can be surprising how much supply is still available, while at such a time the market is expected to be empty. Only time will tell whether this old law still applies in 2019.