After a hard 'reset' of the bale price last week, the tide has not turned this week. Sorters and exporters receive a lot of supply from the field, while the export engine is simply not running at the speed of last season. We do appear to have had a better week in terms of sales. Although the question is whether that volume and feeling can be maintained.
Anyone who drives around in the south will see that many onion sets are now in the swath. Ready to be picked up. Other plots are already empty and it is clear that the yield of onion sets is in any case not a disappointment this season. The abundance of moisture has resulted in favorable growing conditions and that pays off in kilos. According to traders and sorters, real toppers have not been too bad so far, with the latter indicating that they had estimated the size higher for the time of year. Quality is sometimes an issue, but on average it is no different than usual for onion sets.
It just takes some getting used to when agreements had to be made about the price with the grower, because he remains under pressure. The stock exchange listing for Goes also made this clear this week. Last week you could still make €15 or a little more per 100 kilos for onion sets from the field, this week it is €12 or €14 per 100 kilos. With the hot weather ahead after the weekend, growers and sorters are in a hurry to get the onion sets in on time. "To maintain quality, you don't want the onion onions to still be in the swath next week with high temperatures," says a sorter.
After the 'reset' from last week in the bale price, bale prices are also under pressure this week. However, the decline in price levels is to a lesser extent and a further sharp decline is not likely. The instability and uncertainty of this market does not help sales. Importers are literally and figuratively holding back in such a market, because onions can be cheaper a while later. On average, according to the DCA onion bale price quotation, bale prices drop by a few euros to an average of €25 to €26 per 100 kilos.
The supply of triplets is limited, but the same applies to demand. Depending on the destination, triplets often cross the border for well under €25 per 100 kilos. With these bale prices, the fixed agreements and prices that sorters entered into with growers a few weeks ago are quite painful. Especially the agreements that were made well in advance around a grower's price of €20 per 100 kilos.
What will the next few weeks be like?
Opinions among sorters and exporters are divided as to when stability will come to the market. On the one hand, exports to Africa are increasing further and this week we had 'a pretty good week' in terms of sales. On the other hand, things could be different next week as the supply piles up. This week, for example, Senegal appeared to boost exports with a boat. That will remain the case for the time being and the border for imports will close again, meaning that several weeks will pass without the country that is a stable engine for Dutch onion exports. Other African countries are purchasing more volume than before and demand from Central America is also creating extra work. Europe remains relatively limited, with the exception of a few countries such as Belgium. If demand continues in the coming weeks, the onion market will enter calmer waters.
With the current bale prices, we are dropping to a level where there can be more and better competition in onion exports. New destinations come into the picture, such as the Middle East but also Asia, for example. However, it remains to be seen how far other exporting countries can go. But if the seed onions soon come onto the market with better quality, further destinations will certainly offer sales opportunities.
A complete overview of the DCA bale price with explanation can be found here.