Analysis Onions
Onion sorters are staying extremely on top of things
The onion market is somewhat similar to the weather this month. Just like the weather can change from delightful late summer weather to autumnal, the onion market can also fluctuate. Currently, the sun is shining on the onion market, just like outside. Small working inventories at packers enhance the volatility of the already nervous onion market.
Things can change quickly. After a race to the bottom earlier this month, the onion trade is cautiously looking up for the second week in a row. The demand for Dutch onions from abroad is relatively good, and with the current bag prices, we can access almost all markets. Various exporters indicate that there is room for growth. For example, for Southern Europe or Asia, you can already make a nice profit if you can supply good white onions.
The export figures released this week do not completely support the strong demand. A correction was made today for the export in week 35. The correction from KCB/GroentenFruit Huis shows that the UK imported not 4,947 tons but 2,695 tons. As a result, the weekly export amounts to 23,509 tons, which is somewhat disappointing.
Small inventory
The cautious optimism in the trade is largely due to the small working inventories that sorters maintain. Last year, it was all about writing down as quickly as possible, fearing that prices might rise the next day. Now buyers are more inclined to take it easy, thinking 'there are enough onions, I can buy them when I need them'. When, for example, in the southwest, harvesting and loading could not be done for almost two weeks - first because the ground was too hard due to drought and later because the rain locally exceeded 50 millimeters - there is a rush to find onions that can be processed quickly. Even if only a few sorters are needed, the mood can change.
Now that loading can take place almost everywhere these days, transportation becomes the bottleneck. Growers further away from the buyer are at a disadvantage. Letting the good days pass by with the rain predicted for next week is also not the best option. From temporarily storing in potato storage to hastily set up emergency cells, everything is being done to bring the onions in neatly and dry. This could later cause a bottleneck if, for example, the potatoes also need to be brought in. Conversely, sorters cannot really replenish the working inventory, and by bringing in the onions for (very) short-term storage, you spread out the supply.
The DCA Benchmark Price for packaged onions also shows a slight increase this week. Triplets are still averaging below €20. There are fewer large onions this season, which is also reflected in the bag prices. The top end for good supers has exceeded €25 this week.
