Analysis Crops
Egypt enters the European market with determination
A late spring combined with relatively tight stocks caused quite a stir in this period last season. For potatoes, onions, and various vegetable crops, the boundaries were pushed upwards. This year, we once again have a late spring in the Netherlands. The mood among arable farmers is completely different.
The best remedy for high prices is high prices, as the saying goes. So far this season, this mainly applies to onions. Up until December, there seemed to be no problem on the Dutch onion market. Various growers and traders were somewhat banking on a repeat of last season. Stocks were relatively small then, and it was difficult to find onions, even from suppliers outside the EU.
The cards are now shuffled differently. Last season, importers, but also peel companies, gained many new contacts and expanded their networks. With the situation in January and February suggesting that we might have another expensive second half of the onion season, active use was made of that. Especially China tried to gain a foothold here and there, and not without success.
Deciding based on the previous season
Following the market is not exclusively a Dutch phenomenon. In New Zealand, onion cultivation has expanded, but perhaps even more importantly for us, according to various sources, significantly more onions have been sown in Egypt. Some sources mention a harvest this season of around 3 million tons of onions in Egypt. That is about 1 million tons more than last season. The combination of moderate exports and a plentiful supply of onions, both from the old harvest in Northern Europe and the new harvest from Egypt, and to a lesser extent New Zealand, does not bode well for the market from a growers' perspective. Egyptian exporters are selling the new harvest at sharp prices in Europe. Dutch exporters were already on a downward spiral due to disappointing exports and nervous growers increasing their supply.
The harvest of the first onions in Southern Europe is also not far off. In Spain, the first early onions could already be harvested. Due to moderate quality and high costs for (manual) harvesting, Spanish growers are now reportedly taking a wait-and-see approach. A quick turnaround in the onion market is therefore not imminent.
Quality issues in carrots
In carrots, the situation is not much better. The supply of good carrots in the Netherlands is certainly not abundant. As a result, prices on the Dutch market are still holding up fairly well. However, the demand for carrots is not great, so trading is not very active. Just like with onions, Egypt is eager to conquer the European market with the new carrot harvest. Prices mentioned are around or just below €40, delivered in the EU.
The quality of these carrots from Egypt is only moderate to poor according to insiders, and therefore not yet a real threat to European processors. This could quickly change if growers there switch to the slightly later, better storable varieties. New carrots from Southern Europe are still limited on the market. The growing season in Spain went fairly smoothly. However, rain in key growing areas is now causing some disruption as they head towards the harvest, according to insiders.
Potato processors set the market
In the potato market, it is mainly the processing industry that determines the mood. Exporters are struggling to keep up with the prices that potato processors can offer due to good fry prices. This is partly reflected in the Dutch potato export figures.
Last year, there was a shortage of potatoes, and buyers in countries like Italy, Spain, and Portugal prioritized availability over price. The shortage of potatoes is now much less acute. Various sources report that there was more than enough supply of early potatoes from Egypt. It is difficult to get a clear picture of the state of early potatoes in Southern Europe. Italy and Spain have taken over 15% more seed potatoes from the Netherlands up to March compared to the same time last season. This could be an indicator of increased potato supply from that region. On average, the supply of early potatoes only starts after mid-May. The challenge of getting the seed potatoes for the upcoming harvest into the ground in Northwestern Europe does not seem to be significantly affecting the market yet.
