The demand for Dutch onions is reasonable to good, but certainly not exceptional for this time. Nevertheless, grower prices for onions rose a step this week. This price increase is less clearly reflected in the bale price. What packers add on the one hand, they give away just as easily on the other.
That sorting companies find onions on the grower on the expensive side when you compare it to what can be made in the bale, is not uncommon. It is also nothing new that the grower price rises first before anything happens in the bale price. That happened earlier in the season, from the end of October. Sorters grumbled at the time that there was no margin between them and that the step to €16 in the long term for delivery in December was crazy; trade was then walking past the farmer with €13 while growers were asking €15.
That is somewhat reminiscent of the situation we are in now. Growers with good coarse onions still want €18, sorters are more likely to have €15 or €16 in mind, but some buyers are now active with €20 for delivery in one and a half to two months.
Export
There is however a very important difference between the situation in say week 43 and this week. Towards Christmas the demand for onions increased and in week 51 no less than 45.000 tonnes were exported. Predicting is difficult, but we can say with almost certainty that a weekly export of 45.000 is not feasible in about eight weeks. Such export in the second half of the season is also not necessary at all. However, there is a risk that the increase in the grower's price is not directly prompted by a greater demand. If you get a serious offer for the onions you should not joke about it according to a sorter who added that everyone naturally reasons from their own interests. 'Better to regret parting with them than to regret having kept them', they sometimes say about onions. We will see whether this wisdom also applies this season.
A little more in the bale doesn't have to be a problem as long as the barrel stays in it. That's the crux of the matter. Coarse and supers are in high demand and if the colour is good, a nice extra price can be made. The trick is to also find a destination for the middels and the triplets. A nice coarse batch of field crops already contains 30% finer sizes. One sorter looks at how much sales he has for the middels and adjusts the production accordingly. Others mainly look at the margin on the large sizes and see what happens next. Some smaller companies without many permanent staff take it easier and don't work at all or only for a few days.
The differences in demand between coarse and finer sizes are also reflected in the DCA bale price this week. On average, the price for a reasonably coarse batch has increased slightly, by around €0,50 to €1. The bottom of the market is fairly firm, while for supermarkets considerably more is possible than a week ago.
Read here is the explanation from DCA Market Intelligence on the new quotations.