Last year, the Dutch onion was reviled in the Central American country of Panama. This year, however, the country is eager for our product. There is a real onion crisis in the country, pushing prices to unprecedented heights. Does this offer export opportunities?
There has been unrest surrounding the import of onions from the Netherlands for 2 years. Research (2017) showed that the stem nematode was found in a batch of onions. This is a quarantine disease. Local growers are also indignant about the low price level of onions from Holland. Local cultivation cannot compete with that.
Not just across the border
Panama has a series of strict import requirements and in principle applies a tariff wall of 72% for the import of onions. However, domestic cultivation can only meet consumption for a maximum of 25%, making export outside the own season a necessity.
One of the most difficult requirements is the so-called 120-day rule. After harvest, the onion must be sold to the consumer within 120 days. Since Dutch exports mainly rely on storage onions, this is a difficult rule. That is why stakeholders are lobbying to have it abolished. Exporters must also be registered and have a license.
Domestic cultivation
Growing onions in Panama is quite expensive, with a cost price that is double that of the Netherlands. However, yields are at least half lower and losses, especially after harvest, are relatively large. Due to the limited shelf life of the short day onions, they cannot be stored for a long time.
In addition to disappointing cultivation results, weather extremes have had a major impact on the Panamanian onion harvest in recent years. Since Dutch onions appear cheap on the market, which is why our country is even accused of dumping, the acreage in the country itself is declining. According to the latest government figures, the onion area is less than 500 hectares, while a few years ago it was 1.240 hectares. The number of growers fell from 1.200 to 270.
Import tariff lifted
To supply consumers with onions, onions are now imported from the United States. This country is allowed to import 6.000 tons of onions during August without import duty. In the capital, the consumer price is currently between €1 and €1,35 per kilo. Domestically, this is €1,80 per kilo. This is special, because the government normally regulates the price to a maximum of €0,72 per kilo.
In 2017, Panama imported 36,325 tons. These are the latest known figures. Together, more than 1.000 loads of onions were shipped. The Netherlands is the largest supplier, followed by the United States and Belize, with a volume of almost 15.000 tons of onions. It is a relatively new destination, which started in 2013. Also in 2014, almost 15.000 tons were exported to the country.
New export opportunities?
The 2018/2019 export season shows a different picture. At that time, the volume of onions did not exceed 7.000 tons due to the import restrictions. The lowest number ever. There is a good chance that will change this season. Especially during the first 4 months of the season, when the Netherlands can meet the 120-day rule.