Despite the drop in the DCA bale price in recent weeks, the mood in the onion market has become less negative. Supply is high, but demand is currently holding up reasonably well, and the widely held expectation is that Senegal will open its borders to foreign onions later this month. A further price drop is not ruled out. However, the market appears to have more or less bottomed out.
The first seed onions have been harvested. Packers will be handling them increasingly in the coming weeks. Last year, they were still harvesting old crops, an insider recalls. The seed onions, like the set onions, are early this year. Therefore, there's no gap between the set onions and the seed onions. In fact, the early seed onions may hinder the late set onions somewhat.
Packers bought their onions at a high price a few weeks ago and are very hesitant to overbuy. Now that the market appears to be stabilizing, that may change. Prices have dropped significantly in recent weeks, and at current prices, onions are being sold in various countries on different continents: Europe, Asia, Central America, the Middle East, and Africa.
All eyes are on Senegal, the major buyer of Dutch onions, and when that African country will reopen its borders to foreign onions. Many insiders expect this to happen sometime in the second half of this month, but no one can say for sure. As one insider puts it: "Everyone is waiting to see what happens. If Senegal comes, confidence will return to the market and we'll start to shake things up."
The DCA Baal price is taking another step down this week, except for the middles. The thinking is that the bottom has more or less been found, although a further drop isn't ruled out.
Read here is the explanation from DCA Market Intelligence on the new quotations.