We certainly can't call the second half of the onion season boring. The market has gained wings in recent months from a somewhat depressed mood in February. Where there was still a clear buying round last week, both buyers and sellers have dug in again this week, you could say. That doesn't make trading any smoother.
The regional stock exchanges noted a modest plus for onions this week. However, there are no longer many free onions in the hands of the grower. It is not surprising that both Emmeloord and Middenmeer report this week that they are calling it a day with the quotations for this season. However, that does not mean that all onions are gone. There is still quite a bit with speculators and sorters who have ample stock. The first category in particular has booked quite a bit for delivery in June at amounts in the late €40s or early €50s. What will happen to that is still a bit uncertain.
With onion sorters, you see a clear division between companies that are happy with it now and are turning over the stock and then going into maintenance and companies that continue until the new harvest is there. Sorters with fixed obligations, however, have already covered a large part, if not completely, of these with onions. Now that many players who operate more on the day market are dropping out, the pool to sell onions to is getting small. Last week, quite a few growers said goodbye for prices low in the €40s. "It's the really tough guys that are left now," according to a sorter. Among them are quite a few speculators who are not yet prepared to sell at a loss.
If the market for field crops wants to make a step, the bale price still has to do something. That is where the problem lies. Some sorters would still like something, but then it has to fit in terms of prices and the asking price for field crops should not be, as it is now, approximately equal to the bale price. If as a sorter you want to be able to get by with field crops of €50, the bale price actually has to go to €60 and that does not look likely for the time being. Partly because the harvest of new onions is slowly starting in Southern Europe. In terms of quality, a Dutch onion from storage does not have to be inferior, but new harvests are simply easier to sell.
Saving rewarded
What can be said is that long storage was possible for the grower this season. From an average onion price of around or below €15 from harvest to February, the onion price has more than doubled since then, and almost tripled at the end.
The onions here in the Netherlands are generally growing well. Certainly if there is some more rain in the coming days, the harvest of the early varieties looks promising. Some insiders expect that the harvesting of the early winter onions will start in about three weeks. The prices for the onions vary considerably, just like the last sowing onions from storage. Some deals have been done for winter onions for somewhere between €35 and €40. However, agreements have already been made in advance for most winter onions. For the earlier onions - harvested around mid-July - prices are mentioned between €25 and €30. If we get significant precipitation in the coming days, this could drop back a bit, but if it remains dry, the onions could still take a step up. Prices of around €20 are mentioned for fully grown onions.
The DCA Bale Price Onions is taking a step up this week. This is not so much because demand is increasing, but more because supply is decreasing. Several sorters have stopped for this season and those who remain are careful not to start with slightly inferior onions. The supply of onions that have actually been sitting with the sorters for too long is also drying up. As a result, it is mainly the lower end of the market that is pulling the leg.
Read here is the explanation from DCA Market Intelligence on the new quotations.