Analysis Onions

Market is strung together by if-then reasoning

June 21, 2024 - Jurphaas Lugtenburg

It almost seems as if sorters and exporters are ready to call it quits for this season. Cleaning up what is left and starting fresh with the new planting onions is the plan. However, clearing out the last onions from the 2023 harvest is not going very smoothly in this tough market.

The exact amount of remaining onions from the previous harvest is still a guessing game, but insiders agree that there are still quite a few left. How long they will last is another question. For now, they continue to linger in the market, making trading more difficult. Finding a destination for the mediocre or poor quality onions still stored in the shed is becoming increasingly challenging, let alone finding someone willing to pay for them.

There is relatively little trade activity in planting onions. It is still early for bulk trading, but compared to this time last year, there was more action among growers. Of course, it also helped that the market was relatively clean back then, unlike now. Predicting what to expect for planting onions is very difficult. On the supply side, there are enough fields that are in decent to good condition. Having a field with some imperfections is more common this season than exceptional. High yields are unlikely, regardless of the impact of the large amounts of water on quality. On the demand side, reports vary. Some exporters have received several inquiries from Asia and Central America, but are hesitant to commit with the winter planting onions. Other exporters focused more on Africa are less enthusiastic. It seems unlikely that we will see a repeat of Senegal entering the market extremely early.

Warm days
The weather forecasts are being closely monitored by almost everyone in the onion sector. Warm days are predicted for next week, and it remains to be seen whether the onions - which have mostly been soaked in water so far - can withstand the scorching sun. According to some insiders, sowing onions with a limited leaf structure can handle it, but planting onions with a substantial amount of foliage that start to evaporate can collapse quickly. It's challenging to set a price on uprooted planting onions with such weather forecasts and market uncertainties.

The DCA Benchmark Price for Packed Onions is under pressure this week. The price range is roughly between €20 and €25. Last week, higher prices were mainly paid for larger sizes. Now, many packers are more focused on quickly clearing their stock and are willing to make price concessions.

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.
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