Nervous onion growers ensure large supply

Temperatures rising to 15 to 18 degrees Celsius. Suddenly, spring is on its way. This also changes the mindset of many onion growers. In recent weeks, the crops could be kept relatively calm, and there was ample opportunity for ventilation. With the warmer weather this week, that will become much more difficult. It's still cool enough at night, but the possibilities are becoming more limited.

Moreover, this season we're dealing with a product that went into storage early, meaning the onions are physiologically somewhat older than a year ago. Many say the current product is comparable to the one from late March last year.

More germ and bald
After fusarium, we're currently seeing more and more sprouts and baldness in the batches. As long as the sprout is still a tiny point, this doesn't pose any problems for sales. But with these temperatures, that can suddenly change, and a "big, fat, yellow seed" can quickly appear, according to a trader. Once that happens, there's little left to do with those onions.

The fear of being too late to offer onions is causing a surge in supply this week, despite low demand. Buyers aren't buying more than they currently need for sales. It's quite quiet this week, so more is being purchased only in small doses.

Good onions usually sell for 15 cents per kilo. But onions are also bought for 11 and 12 cents per kilo. Finer lots with some tare and sprouts are purchased at these low prices. Simply because there's little demand for fine onions. Larger onions sell well, and buyers are sometimes willing to pay a bit more for them.

For example, a batch traded for 16 cents last week. This was also discussed by the listing committee at the Emmeloord stock exchange. However, it remains unclear to what extent this batch is suitable for retail sale and whether it has GlobalGap certification. Retailers are willing to pay a premium for the best quality. However, the majority of onions are not suitable for this.

Higher inventory estimation
Earlier this week we made a estimate of the quantity of onions available for exportAn optimistic estimate suggests a required weekly export of at least 20.000 tonnes per week.

Several onion exporters and sorters are anticipating significantly larger stocks. They estimate a current available volume of 500.000 to 600.000 tons of onions. This means that 25.000 to 30.000 tons of onions must be exported weekly to clear the market in time for the new harvest.

If the latter is achieved, Dutch onion exports will achieve an exceptional performance this year. A weekly export of an average of 20.000 tons would already be incredibly good, let alone an additional 5.000 to 10.000 tons of onions per week.

To give you an idea: in recent years, exports from February to the end of June dropped to less than 17.000 tons per week. Capacity won't be a problem, as onion growers have more than enough resources. The key is to what extent the market can absorb the supply.

For now, the possibilities seem limited, and the Netherlands will have to settle for exports of 18.000 to just over 20.000 tons per week. Until that improves, a significant quantity of onions will remain on the market, and the quality will not improve.

Red onions
Another big question is how red onions will perform. For a long time, it was maintained that sales of red onions would only pick up in the second half of the season. This is partly why the price of these onions has held up very well – to the great surprise of many market participants. However, the question is whether there aren't too many red onions in storage for the relatively short period in which these onions are suitable for sale.

While one in ten exported onions was red in the first half of the season, this share is expected to increase to around one in three in the coming weeks. This is because a relatively large harvest of red onions was harvested last year.

According to Statistics Netherlands (CBS), the red seed onion harvest last year yielded over 300.000 tons. If 20% of this is lost due to factors such as drying and tare weight, 240.000 tons remain available for export. If one in ten onions was red until the beginning of February, then approximately 100.000 tons of red onions had been exported by the beginning of this month. The remainder will have to find a place in the coming period.