The onion market is difficult to predict. This has become clear in recent weeks. Some processors weren't very confident in the first weeks of January and allowed their backlog to decline too far. Growers are well aware that onions are being sold. On the sales side, several exporters are noticing that things are calming down.
Onions are and remain the most volatile product for most arable farmers. In the second half of November, growers easily declined €18 for immediate purchases, leaving buyers scrambling to close the deal at €20 in December or January. Shortly after, demand dipped slightly, and the buying frenzy vanished.
That's somewhat reminiscent of what's currently happening in the onion trade. Demand in the first two weeks of January has been higher than several players had anticipated. Moreover, buyers are looking for good, large onions because they're simply in short supply, and demand from Southern Europe is expected to increase further. If you, as a grower, have a top-quality batch, taking a gamble isn't a bad idea, according to several insiders.
Don't forget to sell
For a finer batch, especially if you're unsure about its long-term storage, things are different. "If things go wrong, it could take until late February or early March for a new round of buyers, and there are no guarantees that prices will be higher then," says one trader. Better to lose them with regret than to regret having kept them, say some traders, who naturally also have a vested interest in doing so.
Several buyers point to the large onion harvest in the Netherlands, which means that despite the large export volumes in the first half of the season, there's still a significant amount of onion left. While a larger percentage than usual may be lost due to quality issues, this is offset by lower gray imports to Poland. Several exporters are frantically calculating how many tons need to be shipped per week, and most estimates are well over 20.000 tons.
While prices at the grower's (for good onions) are rising slightly, bale prices are under some pressure. Demand from Africa is declining overall, and this is particularly noticeable in the sales of triplets and middle onions. Supermarkets are holding their own because they are in short supply. There's a ceiling, though. Asking for 1 cent more means you lose the order, according to some traders.
Read here the explanation from DCA Market Intelligence on the new quotations.