Slack time makes onion processors nervous

Growers are keeping the market afloat. The high end of the market, around €17 or €18 for immediate delivery or €20 for forward delivery, isn't entirely representative of the vast majority of onions. Such prices are reserved for truly top-quality and very large onions. For a more average batch, the range is closer to €14 to €16. That's the real bottom for most growers. The cost price varies from grower to grower, of course, but at this price level, most are around the level they need to break even. With a long period ahead of the new harvest, several growers say there will still be an opportunity.

Some insiders cite the liquidity situation of some growers as a risk. Things are going well now, but if the bills for starting materials, fertilizers, and crop protection products arrive and there's little income from other crops, growers could feel some pressure to sell onions. Reasonably, this might only occur in April or May.

There is little point in bagging
Things are quiet for most sorters and exporters. Demand from Africa is drying up, and European buyers are in no hurry to buy onions in the Netherlands. "You can lower the bale price, but that won't suddenly generate extra demand. If things go wrong, you'll even achieve the opposite. In a declining market, buyers will be even more complacent and postpone their purchases," says one exporter.

The fact that several processors are very cautious in the coming weeks is understandable. Sharp prices for onions from other parts of Europe are making some in the Dutch sector nervous. Eastern European buyers are sourcing relatively cheap onions from Ukraine. Within the EU, Austria is quite competitive. The Austrian Federal Office for Agriculture is listing prices at €10 to €13 for yellow onions. Germany is approaching the price level of Dutch onions, which are more attractive to Eastern European customers than the Netherlands in terms of transport. 

Although it has little to no effect on the total demand for Dutch onions, the bale price is still under pressure. Less sorting is being done, resulting in fewer supers and triplet onions available. However, maintaining this price stability is proving difficult. In the middle, it's a struggle to find customers. Onions in the 40-60 range have been trading below €20 for some time, but now several sellers with 50-70 onions are also dropping below that price.

Read here the explanation from DCA Market Intelligence on the new quotations.