The price of onions won't go down
The situation in the onion sector is very similar worldwide: the demand is low and the supply is very large, which means that prices fall and the mood in the market deteriorates. While exports might be a solution to disappointing local sales, nowhere does that happen. All warehouses around the world are full of onions and dealers are struggling with poor demand. Europe has more onions in stock than are currently needed on the market. The situation is no different in America, as the Mexican season started early and the harvest in Peru was very good. The mood in the US market is therefore anything but good. Despite these circumstances, there are a few scenarios that give hope for the market to rebound. Dutch onion exporters speak of a significant change in the weather in Eastern Europe or a poor harvest in Brazil.
Large stocks in Germany
According to the latest figures from the German market, stocks are much larger than last year. The German production is expected to be available longer this year, which significantly reduces the export potential for neighboring countries such as the Netherlands. The price has remained stable at 11 to 13 euros per 100 kilos.
Netherlands: Packers are stuck between bale and production prices
Demand on the Dutch onion market is currently low. Due to the loss of Africa there are few alternatives, especially since Eastern Europe is mainly supplied by Germany, Austria and Poland. Dutch exporters are therefore not very optimistic. Given the available supplies, an estimated 17,000 tons of onions should be exported each week. This was achieved last year as there was great demand from European customers and from Brazil. However, both of these factors leave much to be desired this year. The market could rebound if the crop in Brazil were poor or if temperatures were to rise sharply in Eastern Europe (causing quality deterioration). The Netherlands, which sells high quality onions at low prices, could then become a popular alternative. At the moment, however, the situation is such that packers are caught between the prices for large bags (9-11 cents) and the production price (7-8 cents). They can't earn anything from that. Due to the large processing capacity of the processing industry, the farmers gain more and more control. There is too little demand to raise the price of the big bags. The farmers stand firm so that prices do not slide further and the traders have little in stock. Because the farmers are putting everything on one card and the packers are taking a very close look at the situation, there could be some surprises in the coming weeks.
Warehouse full of onions in Spain
Last year, large quantities were withdrawn from the market at this time due to quality problems. This year, however, there are no similar problems and the warehouses are fuller than usual. The reason for this is the good quality of the harvest and that only a few onions had to be sorted out. The dealers assume that they will have enough quantities before the new production becomes available in April. Importing large quantities is therefore probably not necessary. The acreage has reportedly decreased slightly over the next season. The influence of winter weather is still unclear, but it is certain that the harvest will start a little later. As for exports, Spain faces the same problems as other countries. There is not enough space on the world market. Because of the growing local production, Brazil has been lost as an important point of contact. This reduces prices.
Danish onion farmers have the same problems as everyone else in Northern Europe: the large supply depresses prices. The sector usually exports to Sweden, Germany and Norway, but this season it only supplies the local sector. The government has set the price of onions, which keeps them stable. The market is very traditional, with yellow and red onions in particular creating the demand. Pink onions hardly stand a chance in the small market. In addition, consumers are unwilling to spend money on lavishly packaged onions. The demand for organic onions continues to grow.
Low demand in Italy sets the tone in the market
The Italian market remains weak. The supply is large, but the demand is disappointing. As a result, prices are low. In addition to the local harvest, imported products are also available, which puts prices under pressure. According to one farmer, local production is not unusually large, so demand is what determines the current situation in the market. On March 2nd, prices on the Fondi wholesale market were between 60 and 70 cents. In Verona a kilo cost between 50 and 65 cents. However, the prices for shallots depend on the country of origin of the products. Local shallots pay between 1.75 and 1.90 euros per kilo and imports from France 2 euros per kilo. In Torino, prices fluctuate between 40 cents and 75 cents, depending on the type of onion.
Ukrainian exports rose sharply
The exports of the Eastern European country to Europe and other regions rose sharply between July and December last year. The largest customer during this period was Iran with 2,523 tons, followed by Great Britain with 1,385 tons. Belarus is in third place with 551 tons. Due to the large quantities, the price fell by half last year. On January 27, the wholesale price in Shuvar, western Ukraine, was between 3.80 and 3.30 UAH / kg (0.09 to 0.11 euros / kg) compared to 5.50 to 6.00 UAH / kg (0.20 to 0.22 euros / kg) in the previous year.
That was another incentive for exports. "It's great that Ukraine has almost doubled its exports to the EU," said one trader. After Great Britain, Bulgaria is the largest buyer within the Union with 126 tonnes. The UK is particularly interested in peeled onions. The second half of the season was a good export season. The markets bought significantly more onions. Exports to Iraq have increased from 300 tons in the first half of the year to 2,5000 tons. Many exporters expect to ship a record volume to Iraq next season.
Israel is focusing on better storage
The sector mainly focuses on the local market. Small quantities are only exported to Europe for a limited period of time. The price for red onions is currently around 80 cents per kilo. White onions cost 70 cents per kilo. Prices remain stable all year round thanks to year-round cultivation and good storage capacity. With the exception of the rainy months of January and February, bulbs can be planted almost at any time. Premium onions are grown in the fall and early spring, while onions for the stockpile are grown between March and December.
The sector invests in technology to improve the quality of the stored onions. This technology could also help the country to optimize its position as an exporter in the future. So far, export to Europe has only been possible if the harvest in the most important European production countries is poor. New storage technologies could make it possible to open up new markets.
Prices in South Africa are falling
In South Africa, onions are grown in the North Cape, Western Cape and Limpopo. There are more hours of sunshine on the capes, so the dark onions mainly come from these regions. In Limpopo, white onions play a bigger role. Red onions are grown in small quantities across the country because there is little demand for them. Last year more than 38 million 10kg bags were sold in local markets. Exports to African countries have also increased in recent years. However, this market is currently rather disappointing due to the low oil prices. There is currently a large selection and the prices are around 30% lower than last year.
India: prices hit rock bottom
Onion prices in India are currently at their lowest level in 5 years. You have reached a minimum of 450 rupees per pound, which is about 12 cents per kilo. The sharp drop in prices is due to the good harvest, a lack of storage capacity and poor infrastructure. A year ago the price was 740 rupees per hundredweight. Prices are expected to stabilize in March as production will decline.
Peru: Large supply, low prices
During the past season (August 2016 - January 2017) the country exported 108,000 tons of sweet onions, according to statistics. That is 11.11% more than the 97,000 tons last season. Because of the large harvest, prices began to fall towards the end of the season. At the beginning of the season the prices were still at a similar level as at the same time last year. However, towards the end of the season, prices were 25% lower. This downward trend was first observed in November.
The United States is the main market for Peruvian onions, accounting for 85% of exports. Europe is an attractive market, but the quantities shipped there are small.
The season has not gone well for the size of the onions. Due to various factors, there were hardly any larger sizes. One of these factors was the weather, which on average was warmer. In addition, some parts of Ica had to deal with water shortages and quality problems. As a result, optimal irrigation was not possible. The cultivation area for sweet onions is between 2,500 and 3,000 hectares. The majority of the products are grown in the regions of Ica, Norte Chico de Lima and Arequipa.
In the US, there are many high quality onions from Idaho and Oregon in stock; however, the early imports from Mexico will create some problems in the market. Mexican onions are available three to four weeks earlier than usual. There is also some supply from Peru. This situation pushes prices down. In two to three weeks, plantings for the new season in Idaho and Oregon will begin as the winter in the area has been harsh. Normally the first bulbs would be planted in early March, but the fields are currently still covered with snow.
The local market therefore remains weak and the export market cannot provide any remedy. Australia has always been a big market, but by breeding and developing new varieties, the country has now been able to grow its own red onions. Egypt and Israel also planted more onions. In the past, Dubai and Kuwait have also bought onions from the US, but they no longer rely on these imports.
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