Sorters and processors had already predicted that bale prices could not be maintained, but the fact that they took such a sharp turn downwards this week is somewhat surprising. However, more and more onion sets are coming onto the market and there is currently no demand to absorb that volume, according to exporters. While the really big wave of onion sets has yet to arrive.
Until two weeks ago, bale prices were still holding up quite well. The supply was limited due to the wet weather and that kept the price down. Now that the onion onion harvest has started, the market has changed considerably. The supply of onion onions - which will increase significantly in the coming weeks - is difficult to process given the current demand in the onion market. Sorters and exporters are certainly not standing still and have orders, but there is simply not enough demand at the moment to get rid of everything.
Africa does have a market for exports, but for the time being only to a certain extent. Senegal does not appear to be producing large volumes in the near future, while this has always been a stable factor in exports. Various reasons are given as to why, but the bottom line is that our own harvest must first run out. In addition, there are few gaps to fill in the European onion market. Central America has a reasonable market, some exporters report.
Stability in the market
Not all of the range is suitable for export destinations and regions where onion sets take a long time to travel. These destinations can only be served once the sowing onions are available. "There are still competitors who offer onions at competitive prices, such as Egypt, but also Morocco," says an exporter. In addition, the onion market lacks stability. When the market is declining, relatively little is purchased because the price level is lower again a little later. Various sorters and exporters notice this among their buyers.
Baalprijs does a reset
While last week the bale price was on average around €35 per 100 kilos according to the DCA quotation Bale price of Onions, €30 per 100 kilos is now already on the high side. According to the quotations, the range runs from €26 for the triplets to a good €31 for the supers, with some exceptions. Placing one clear price on a size range is difficult in this market. Sometimes trade is done with one price for all sizes, other times it is done by size sorting. Sorters had expected a decline, but they did not see such a sharp decline coming. In their opinion, the bottom has not yet been reached in bale prices.
Grower prices
With the bale prices of recent weeks, there was still room to drop somewhat when you compare it with grower prices. And that is why they are declining to a limited extent for the time being. The stock exchange in Goes recorded €17 to €20 this week for both fine and coarse size grading. Nowadays, this is no longer realistic and the reality according to the trade is closer to €15 to €16, although the free trade in onion sets is very limited and difficult to put a price on. Sorters and processors have many fixed agreements with deliveries from August 1. They first settle those obligations, then they see how they will work out and what is still needed.
A complete overview of the DCA bale price with explanation can be found here.