The onion harvest in the south of Brazil is in full swing. The yield estimate in the main production region of Santa Catarina has been revised downwards, but is still strong. That could have an impact on onion exports from the Netherlands.
Brazil is the largest importer of Dutch onions in South America. In 2019, more than 49.000 tons of onions went that way. Brazil is often an important market for Dutch onion exporters, especially in the spring. Then the country's own stored production thins out considerably. More onions are then imported to meet domestic demand.
Dutch onions 'cheap'
These onions are sourced from neighboring Argentina and Chile, among others. In addition, in recent years there has generally been a strong demand for onions from the Netherlands, which are cheap by Brazilian standards. Whether that demand will be as strong this season is doubtful. Brazilians previously counted on very strong domestic production. Due to unfavorable weather conditions, the yield forecast has been adjusted downwards.
An estimated 60.000 hectares of onions are grown in Brazil. With an average yield of barely 30 tons per hectare, annual production is around 1,6 million tons of onions. Most onions are grown in the state of Santa Catarine. As in the other southern regions, onions are harvested here between November and April. This is gradually shifting to the central and northern part of Brazil.
Much larger yield
The growing conditions for the onions were favorable in Brazil this year, unlike last year. Expectations were high earlier this year, especially in Santa Catarine. The reason was an area expansion of 5% to almost 19.300 hectares. At the end of the summer, according to market experts in this region, a gross harvest of 578.000 tons was still expected. Storms and hail have meant that this forecast has now been adjusted downwards to 506.000 tons.
That is still significant. Last year the yield was between 350.000 and 400.000 tons. And so it is assumed that Brazilian import demand will certainly not be greater than in other years. And the demand that exists may be met in its entirety by Argentina, where conditions for the 2021 onion harvest are favorable. Most onions for export are grown in the south of Argentina. The harvest has just started there.
Euro expensive for Brazilians
Insiders report that the acreage here is about 10% larger. This means that there will be sufficient supply to supply the Brazilian market. The favorable exchange rates will give onion sales from Argentina to Brazil an extra boost. In that respect, Dutch onion exporters are at a disadvantage, as the euro is currently expensive compared to the Brazilian real. By the way, the export of Dutch onions is breaking so far this season all records, which means the market can withstand a blow.