Onion processors have all reopened this week. There was considerable demand for onions, especially in the first half of the week, thanks to two ships bound for Africa. Growers and processors have varying opinions about how things will proceed in the coming weeks.
Low inventory and some transport disruptions due to the winter weather led to a buying frenzy at the grower's. Growers located near a processor and able to load their goods indoors were particularly fortunate to see a surge in direct delivery this week.
The fact that quite a bit was bought this week has boosted growers' confidence. It's been said before, the onion harvest in the Netherlands was good, but whether all those onions will come out of storage in good condition is another story. With optical sorting, processors are more agile than a few years ago. There are limits to what's possible, however. The percentage of wet onions that smears can be a real problem in some batches.
Growers with really good, large onions know this too, and they're not exactly willing to part with them. When processors inquire again in a week like this, they're encouraged by the idea that there might be more in store later in the season.
Expensive stock
Buyers are much more cautious. Several processors are now working with units purchased in late November or early December for €18 or €20. These are often offset by some cheaper onions purchased more recently. The average purchase price therefore remains too high, as the average bale price is €20, according to several sorters.
For the longer term, starting with deliveries in late February and March, some sorters would like to secure good onions suitable for Southern Europe. There's often a gap between what growers are asking for and what processors are willing to pay. "It's quite possible that €25 for large onions will be the market price towards spring, but I wouldn't dare take that risk. It wouldn't be the first time the market has remained stable or come under pressure," said one sorter.
The DCA bale price for onions remains relatively stable on average. Triplets and middles are under pressure, and most sorters still handle the largest volumes of these. There are few supermarkets, partly because they are turning less than a few weeks ago. Larger sizes are particularly in demand. Therefore, the price for these is holding steady and even showing a modest increase.
Read here. the explanation from DCA Market Intelligence on the new quotations.