News Onion Analysis 2019
'Brazilian housewife prefers our onions'
Agricultural country Brazil has about 63.000 hectares of onions. However, the cultivation is very diverse, with companies ranging from 10 hectares to 1.000 hectares of onions. Sebastião Muller farms in the southern state of Santa Catarina and grows 20 hectares of onions. "Challenges abound, although domestic demand remains good."
Brazil, the fifth largest country in the world, has its own onions all year round, although the volume does vary per period. Cultivation takes place in different states, each of which has its own climate. The South American country is 5 times the size of the Netherlands and 204 million people live on 8,5 million square kilometers. Onions are grown in the southern states of Paraná, Santa Catarina and Rio Grande do Sul. The harvest there starts in November and lasts until April. After that, this cultivation shifts to the central and northern part. Southern production is about 200 tons. The growing season was wet this year, so many onions were imported from Argentina, Chile and the Netherlands. As a result, the price level rose to €300.000 per 80 kilos.
Choose with the wallet
Arable farmer Sebastião Muller is located in Santa Catarina. "There are mostly small family businesses here that grow no more than 10 hectares of onions," he says. Muller grows 20 hectares of onions himself. He is also director of Agritu Sementes, which propagates and trades onion seed. He visited the Netherlands this summer via Bejo and De Groot & Slot. The growers with whom he visited the Netherlands at the beginning of August generally owned larger companies (between 15 and 25 hectares of onions). "I come mainly to learn about storage. We now store the onions ourselves, but I am looking for new techniques. I also hope to find out more about your cost price. Our cost price is very high. Dutch onions are cheaper , which is why they are thought to have been dumped on the Brazilian market. The Brazilian housewife prefers an onion from Brazil. It tastes the best, but they choose with their wallets and still buy Dutch onions."
The reasons for its high cultivation costs can be traced back to cultivation. "Almost all the work is done manually," he reports. "The harvesting is also completely manual, because mechanical harvesting causes damage. Planting and harvesting alone costs me 6.000 Brazilian real per hectare." Converted this is €1.300. On the other hand, finding work is not a problem. "Unemployment is high here (more than 30%). The big problem is the additional costs. If you hire staff, then you are obliged by Brazilian law to pay their pension, insurance and training." You can see that in years with a high price, cultivation is behind the market. "With compelling supply, a price level of €0,80 can fall back to €0,05."
Strict policy
The arable farmer also notices that the weather is changing, although that is not his main concern: "Production costs are increasing. Not only are the costs of labor rising, but also the costs of fertilizers, fuel and crop protection. Due to the crisis the Brazilian real is very low and purchasing power is falling. Onions are not a basic need, which reduces consumption. It is also thought that we can inject everything, but that is really not the case. The rules are strict. Only when a substance is used in the Netherlands or the United States is allowed in onion cultivation, can we use it." You must be registered in Brazil as an onion grower to be able to buy crop protection products. "Empty packaging must be handed in for inspection. The residue inspections are also strict."
Organic cultivation is now slowly emerging in Brazil. "Each state has its own minister of agriculture, so the rules may differ from state to state." The arable farmer does not think that rules will change with the appointment of Prime Minister Jair Bolsonaro. "However, I do hope that the bureaucracy will decrease. The strict inspections can continue, because they ensure good quality. The crop protection policy is really not relaxed, despite what the media in your country would have you believe."
Increase Yields
On Muller's company only onions are grown, but arable farmers in the region do have a broader cultivation plan. This also mainly includes grain maize, soybeans and vegetables. "The acreage in Santa Cantarina must remain stable, but the hectare yield must increase," he believes. He is satisfied with a yield of about 40 tons per hectare, because this is good for this area. Further north, the yield can be as high as 100 tons per hectare. The onions are often sold through intermediaries. They sort the product and sell it to market traders in the region. Some growers sort and market themselves. They are watching the cultivation in the Netherlands with great interest, but the motto remains: own onions first.
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Niels van der Boom
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