The mood on the onion market is shifting. There is certainly still a high degree of confidence in the market, but it all still has to happen. The European onion stock does not appear to be overly large, which offers opportunities for Dutch exports within Europe. On the other hand, Dutch onions are relatively expensive, which means that buyers continue to look for a cheaper supply.
Many sorters report that it is very quiet and onion exports seem to be taking a big step back. There are significant differences between the sorters. One company is running less but can still keep going, while other companies are scraping by to get some more work. The calm on the onion market is mainly because the Africa season is largely over and new destinations are not yet presenting themselves. Information is being sent from Eastern Europe, but potential buyers can still get cheaper onions. What certainly also plays a role is that this group feels that the Dutch market is slightly less fixed than a few weeks ago. What makes the onion market even more unpredictable is the uncertainty about how many onions are in the hands of speculators and what they will do in the near future.
Who sets the tone?
Until now this season, the grower price was leading and the bale price followed with a few weeks' delay. This is now taking a cautious turn when we look at developments on the regional stock exchanges. We haven't seen many corrections downwards yet this season. The fact that a small price correction was coming does not come as a surprise to most insiders. There are varying opinions about how the market will develop further in the coming weeks. There is a school of thought that believes that prices need to drop a little further to become competitive on the European market again in order to stimulate trade, after which the price will automatically pick up again.
Others believe that we are heading into a longer period of pushing and pulling to get the trade done. Due to the relatively high prices, buyers continue to look for cheaper onions and if they find something that is below the Dutch price, they will hit you with it. On the other hand, with the current purchasing prices, there is not much room for prices to drop, especially if you take into account that quite a few onions have been sold in the long term at very decent prices.
The DCA quotation Bale price of Onions just like the grower prices, is also taking a step back this week. On average, the bale price is now around €49 per 100 kilos. The relationship between the bale price and the grower prices is therefore still out of proportion.