What's in store for the onion market? That's the question many growers and sorters are asking now that onion prices are rising so easily. As usual, everyone is also thinking about this from their own perspective.
The supply of onions temporarily stored in potato storage has been cleared, and the quantity of onions in emergency storage is also rapidly declining. This is clearly noticeable in the trade. Growers with good onions in storage aren't willing to give them away for any price. Processors are seeing this too. While two or three weeks ago, €18 for December delivery was considered excessive by buyers, this week €20 for December and €18 for immediate delivery is common for good onions. Due to rapid exports, several sorting companies need to replenish their stock.
There's some grumbling among processors and exporters that an onion price increase isn't beneficial for the market, especially for sales to Senegal. There are enough, or rather too many, onions there, and if you want to keep things moving, you shouldn't mess with the price too much, some exporters argue. "The fact that exports are going so well is because we're practically the cheapest in terms of price," says one exporter. With a harvest of 1,4 million tons in the preliminary CBS estimate, we'll need everything we can to clear the entire stock, a wisdom regularly heard from the trade sector.
Dip doesn't seem likely
From the perspective of processors and exporters, it's logical that they're trying to moderate the market a bit. Historically, the market doesn't often slow down around this time. In terms of volume, these are usually the export weeks, and it would be strange for this season to be any different. Only when most sorters have finished their Christmas shopping does the mood usually change.
Buyers are very cautious about onions for delivery in the second half of the season. With a bit of luck, Africa will remain open for the first few weeks of January. With a bit of bad luck, you'll have a slow period at the beginning of the year. As a processor, you don't want to be stuck with expensive onions during that period. What the demand from Europe will do later in the season is still largely a matter of conjecture. The fact that Poland is currently only entering the market sparsely isn't considered a particularly positive sign by the trade. "Last year, they practically pulled a batch with something wrong with it out from under your hands, and now you don't hear or see them at all," according to an insider. Growers are asking for, say, €22 in February, or even €25, but buyers aren't snapping up those numbers yet. "There's more room down there than there is up there," buyers readily claim. That, of course, is also part of the game.
The DCA Bale Price for Onions is rising slightly this week. Sorters note that this isn't happening very enthusiastically. If you bid too high, you won't hear back from the buyer, and they're also quite willing to let it slide by half a cent, according to insiders.
Read here the explanation from DCA Market Intelligence on the new quotations.