Sales of medium-sized onions are faltering, while demand for large onions and supermarkets persists. Due to the surplus of medium-sized onions, prices are falling and sorting lines are occasionally being shut down. Read more about the pressure on onion bale prices.
Some companies have come to a standstill because they first want to sell their stock of medium-sized onions. As soon as those onions are gone, operations can resume. Otherwise, the medium-sized onions will pile up without a decent market for them.
A sorter phrases it as follows: on average, half of the onions in a batch are smaller than 60 millimeters. About 30% are sold, meaning there is more supply than demand for these onions. As a result, prices keep dropping in an attempt to secure an extra order. Yet, this does not lead to increased demand for onions. "It is becoming more and more of a struggle to hawk the undersized ones."
Various traders, sorters, and exporters find the onion market rather dull at the moment. There is only half a week's worth of work. This is not surprising in itself, as it is essentially the case every year during this period. As soon as Senegal closes its borders to imported onions in January, the demand for Dutch onions halves. That is why onion processors feel every year in February and March that there is little to do.
This year, that slump seems to be lasting a bit longer for a large proportion of companies. The frustration is further fueled by falling prices. Due to low demand, bale prices have already dropped so low that there is nothing left for anyone to make. "They begrudge each other the loss," comments a sorter and exporter.
Morocco provides a small bright spot this week. This North African country temporarily has a gap to bridge between the old and the new harvest. However, they are asking for large onions of 60-80 and up, and supers. Africa is normally the main destination for medium-sized onions, but now Ivory Coast is also asking for more large onions.
We also see this development reflected in bale prices. The DCA bale price for onions in sizes 40-60, 45-60, and 50-70 millimeters falls by €0,50 this week to €16 per 100 kilos. Large onions from 60 millimeters upwards show a similar decrease, bringing the price to €19,50 per 100 kilos. For supermarkets, the price of €25 per 100 kilos remains unchanged, and the 35-50 millimeter triplets stabilize at €15,50 per 100 kilos.
Read here the explanation from DCA Market Intelligence on the new quotations.