The big players with sorting and export operations say they currently have a considerable workload. Smaller companies are struggling. All in all, lower demand is putting continued pressure on sales prices.
The customer bases of the various companies create significant differences between sorters and packers. Do you produce onions primarily for export to Africa, or do you have a well-stocked portfolio primarily serving retail customers? Retailers are willing to pay a premium for the best quality, and therefore sorters and packers in this segment experience less price pressure.
Companies that rely heavily on exports to Africa, however, are experiencing significant price pressure. More and more countries are closing their borders to protect their own local production (Senegal and Gambia) or raising import duties (Mauritania). This means that the volumes going to Africa are significantly smaller than a few weeks ago.
Moreover, operations are being conducted with a razor's edge. It's a case of take it or leave it, says one onion sorter. "Buyers make an offer and you accept it, otherwise they'll go elsewhere. There's no room for a counteroffer. There's always someone willing to do it cheaper," he explains the current situation. To maintain sufficient work for the existing staff, an order is therefore accepted, albeit somewhat reluctantly.
Lack of demand
All sorters realize that further lowering sales prices won't lead to increased exports at this time. There's simply no demand at this time. Since Senegal left the market, sales have barely halved. It's just a matter of waiting for European destinations to take over.
However, there are more than enough onions for sale in Europe. Austria, in particular, is cited as a strong competitor on price. But onions are also traded in Germany for lower prices than in the Netherlands. The Austrians also have the advantage of being closer to European destinations, allowing them to benefit from a few cents' transport advantage.
The quantity of lower-quality onions hanging over the market isn't helping to boost the market. Poland wants the onions, but won't pay more than 3 to 6 cents per kilo. While some onions are being shipped there at these prices, it's completely insufficient to clear the market at the bottom, as was the case last year.
Bale prices down a little further
The result of all this is that DCA bale prices are falling further this week. For triplets, the price is down 50 cents to €17 per 100 kilos. It's worth noting, however, that prices for this size vary widely. It all depends on how many onions a company has to sell in this size and whether they have customers. The differences are significant. One company has a surplus, another a shortage. One sorter says bluntly: "You have to dump those onions."
This week, several sorters say they are loading slightly more onions into containers for Ivory Coast because a ship will be unavailable next week. This immediately means there will be slightly less demand for medium-sized onions next week. Prices for this size therefore remain under pressure, falling by 50 cents this week to €18 per 100 kilos. The selling price for 40-60 millimeters is generally somewhat lower, while size 50-70 is mainly sold for €18,50 to €19 per 100 kilos.
The larger onions are suffering somewhat from the lower sales of medium-sized ones. The 60-80 millimeter grade is dropping to around €20 per 100 kilos. Depending on the customer base and the quality of the onions (whether they come with paperwork or not), prices range from €19 to €24 per 100 kilos. The same applies to supermarkets, where prices range from €22 to €26 per 100 kilos. The DCA bale price for these onions is dropping by 50 to €24,50 per 100 kilos.
Read here the explanation from DCA Market Intelligence on the new quotations.