The onion market is in a split. Prosperous exports in a rising market have boosted confidence in the market. Now the cards are shuffled differently and the search is on for buyers. Nothing strange for this time of year, but a situation that fuels doubt and uncertainty within the market.
There is confidence in the onion market, but it all still has to be done, is a frequently heard comment. This week quite a few onions have been produced for Africa, but not much is available yet at various sorters for next week. We are heading for a quiet period, say several insiders. Eastern European buyers still find Dutch onions too expensive and clearly sense that Dutch trade is slightly less steady than a few weeks ago. Buyers who do not necessarily have to, are now mainly watching the cat out of the tree. On the other hand, Poland in particular has a good market for bad onions at very reasonable prices. This indicates that the supply of onions on the local market is no longer available.
Deliberation and weighing
Sorters are in doubt about what to do next. In the first half of the season it paid off to go along with the growers and speculators. Due to the rising bale price, sorters were getting away with onions that were actually just too expensive at the time of purchase. Some sorters are now building up their work inventory and are not taking on new positions, pending how the market will develop in the second half of the season. Other sorters are anticipating a quiet period and expect demand to pick up again towards March. And if everyone wants onions at the same time, the price could go up again. That group is willing to buy something provided the price is right.
The relatively high prices in themselves also pose a certain risk. European buyers are therefore increasingly looking for who can deliver the cheapest. It may also arouse the interest of suppliers from outside Europe who think they can also participate for that price. On the other hand, a lot of Dutch onions have already been exported in the first half of the season. Dutch exporters therefore feel less need to struggle to keep the market clean.
The DCA quotation Bale price of Onions remains largely the same as last week, but the market has passed the provisional high. The average bale price is around €50 per 100 kilos. Sorters are looking for customers for quieter exports. However, due to the high purchasing price of the onions, there is little room for the price to drop, according to several insiders.