Onions from New Zealand less popular in Europe

A favorable growing season, onions of good quality, and a new trade agreement with the EU instilled confidence in onion growers in New Zealand. However, the expected export to the EU has not materialized in practice.

The European Union is the main market for New Zealand onion exporters. Approximately a quarter to a third of onion exports in recent years went to the EU. It is not surprising that there was a lot of enthusiasm in the New Zealand onion sector about a new free trade agreement with the EU. As of May 1, the 9.6% duty on onions has been abolished. With the duty gone, Onions New Zealand estimated that around 35,000 tons of onions could be exported to Europe duty-free this season, bringing about 3 million New Zealand dollars (approximately €1.7 million) into the sector.

Obstacles
The high expectations have not been met. As known, onion prices in Europe have taken significant steps back in recent months. Additionally, transportation from New Zealand has become more expensive due to issues in the Red Sea. This has made it difficult for New Zealand exporters to firmly establish themselves in the European market. Up to week 18, only '45,722 tons have been exported to Europe.

Some exporters notice a societal trend that does not work in favor of New Zealand. Supermarkets are focusing more on local products. As long as there are enough good onions in Europe, the switch to new harvest from the other side of the world is postponed. This narrows the gap between old harvest from Northern Europe and the new harvest from the Mediterranean region, which is crucial for New Zealand.

The moderate demand from Europe is not the only setback for New Zealand exporters. Indonesia introduced new phytosanitary rules this season, making onion exports to Indonesia more challenging. This comes in a season where New Zealand relies more than usual on demand from Asia. The market for red onions is healthy according to some sources from New Zealand, but yellow onions are struggling.

Jurphaas Lugtenburg

Jurphaas Lugtenburg is a market specialist in onions, carrots, and commodities such as wheat, corn, and soybeans at DCA Market Intelligence. He combines his degree in business administration with a passion for farming.

j.lugtenburg@farmerbusiness.com