The signals in the onion market are contradictory. On the one hand, trade is difficult and growers and sorters are having a hard time coming together. On the other hand, there is quite a bit of expectation value in the market if we look at the things that will be done in the long term. Whether those expectations will be met is another matter. It could still go either way if you draw parallels with previous years.
If we look at the €30 and more that is now being paid for good coarse onions for delivery in May with an average stock market listing this week 14 of €21,50 for 60% coarse, then confidence in the onion market seems to be fine. "It is much too expensive now, but since October we have actually seen that you just have to participate every round and that it then works out quite well", according to a sorter. What is causing some concern is the role of speculators and sorters who do something to speculate. If those onions change owners a few more times before they reach someone who actually loads them, that could well give a distorted picture of the actual stock and demand.
What's left in the barrel?
What that demand, and most likely the price, will do remains a difficult question to answer. If we look at price trends, the current season is somewhat reminiscent of the 2013 and 2019 harvest years. Both were years with relatively flat trends and a peak in price towards the end of the season.
The ratio between total harvest and export could be another indicator for the price trend. If we take the harvest estimate of the CBS and the export figures up to and including week 11 of KCB, then about two-thirds of the harvest was exported this season. That is somewhat comparable to harvest year 2019, when 70% had been exported at this stage. And then too, the harvest was relatively large at 1,35 million tonnes. The peak in the price was then only at the very end of the season. In 2013, only half had been exported in week 11 and then prices steadily increased in the spring to correct later.
The relationship between grower price and bale price is and remains a sensitive issue among sorters. On the purchasing side, growers are firmly on their feet and on the sales side, packers are afraid that their competitors will run away with the customer. "They don't want to let each other lose yet", is a statement that is often heard.
It is difficult to put together a bale price that does justice to what is actually happening on the market this week. There is limited demand for finer sizes, especially if there is still something to be said about them. Beautiful coarse whites are in great demand (and there are not many of them) and you can almost ask whatever you want for them. Even if we leave the extremes out of consideration in the DCA Bale Price Onions, the range remains very wide with €16 at the bottom of the triplets to €33 at the top of the supers.
Read here is the explanation from DCA Market Intelligence on the new quotations.