Analysis Onions
Processed onion trade keeps DCA benchmarks steady
The biggest rush seems to be over in the onion market. For December, sorters have done their shopping and they are not looking much further ahead. However, the mood is starting to shift. The past few weeks have been really busy, but now it's getting a bit calmer. This is also reflected in the DCA Benchmark Price for packed onions this week.
You could feel that the onion export would slow down at some point. It's just happening a bit earlier than many expected, in the first week of December. A boat is scheduled for next week, and with the Christmas holiday later this month, it wouldn't have been surprising if the slowdown happened after next week. That's the beauty of onions, things always turn out differently than expected.
There is not much reason for concern among sorters for the period leading up to Christmas. Buyers have brought forward orders due to the rising market, and now we are seeing the consequences. Another factor that is not helping is transportation. Containers are relatively expensive and availability is uncertain. Do sorters/exporters want to work overtime to handle as many tons as possible and then wait to see if the last kilos will be paid for? The answer from several sorters seems to be no for now. By doing so, sorters are implicitly indicating that the market is healthy and they have enough work to not have to take on everything.
Export
The most recent export figure is encouraging. With approximately 43,500 tons in week 46, we have by far the best export week of the season. This season, every good export week is followed by a slower one. Currently, both growers and sorters can benefit reasonably well, but considering the harvest, there will still be plenty of onions left for the second half of the season. Predicting demand is a bit like looking into a crystal ball. However, there are some cautiously positive indicators. Large white onions are already finding their way to Southern Europe. Additionally, Dutch onions are priced at a level that Eastern European buyers normally find acceptable. Coupled with a moderate onion harvest in Poland, it is possible that if demand from Africa decreases, European destinations may show more interest in Dutch onions.
The DCA Benchmark Price for packed onions has largely stabilized this week. Prices have increased slightly, but it's mainly the lower end that has risen. Last week, sorters were hoping to get a little more the following week. This week, sellers are mainly satisfied with what they have and are trying to maintain that.
