Global onion market short review 2019.
By the opinion of Freshplaza experts, many onion traders around the world are worried about supplies of this vegetable. They have been asking each other the only question: where the onions are. The harvest in the Noth Europe is disappointing due to the dry, hot summer, in the US is the same situation because of the rain. Onion prices increase worldwide and traders are looking for new suppliers & destinations. China started exporting to Europe, other countries, such as Kyrgyzstan, are trying to take place on the European market.
The Netherlands: remarkable season with small harvest and prices on the rise.
Dutch onion exporters assess the year as remarkable. The available stocks are much smaller due to the thin crops caused by the dry summer. The total volume shipped in the third week of 2019, exceeded 600,000 tons, more than 20,000 tons had been exported per week at high prices. Chinese onions export to Europe increased due to the current situation: high price for Dutch onions combined with the lower harvest in Europe (1.2 million tons lower). To avoid the onion shortage on the European market, importers have to ship in the New Zealand, Chilean, Argentine, South African and Egyptian onions. Presently, the demand from overseas destinations is moving location to Europe.
Italians gain from a good market
The price is high & the stocks are enough for the month thanks to imports. As one of the producers said, the harvest was good. Onion output in Italy was compatible with that of previous years. As for price, it was on rise from the start & had gone up day by day due to the shortages in the Northern Europe. The season started with 0,25 Euro/kg for yellow onion and 0,30 Euro for the red. This, of course, concerns the onions of perfect quality & best sizes.
In February in addition to Italian harvest, onions were shipped in from France and Austria. According to one of the traders, the onions in big bags were sold for 0,6 Euro per kilo. The price for larger sizes of domestic onions reached 0,5 Euro. Local farmers don’t also expect any significant changes for the new season.
Some traders reported about Italian growers who kept the harvest and speculated to get higher prices. Obviously, some of the producers tried to compensate the last years’ looses this way. But now it doesn't make any sense to be on the long side of the market because the import season is starting. The wholesale price for yellow onions is up to 0.70 Euro/kg and shallots reach up to 1.75 Euro/kg. These are the highest prices in the past 10 years.
Germany: local crops still available until mid-March.
In central Germany the stocks of local harvest are running out. By the words of one of the traders, German onions (yellow and red) will probably be still available until mid-March. Then the Dutch imports will be switched on for a month. From mid-April, onions are imported from New Zealand & remain on the market until the start of the German season. There was enough stock until the beginning of February, the condition of the onions in storage also remained perfect. Now to the dry, hot summer the product is getting old faster than normal. Yet there are no worries about shortages. The price of 48 Euro per 100 kilos is much higher than average.
France: price has doubled.
According to Freshplaza experts, French onion market is under the pressure. As the traders point out, the quality of French onions is good, but the small sizes dominate due to the dry weather. The situation with the stocks is quite the same, as in the rest of Europe – the shortage of available volumes. The crop is lower than the demand this season. Prices are high from the start and constantly demonstrate the rising trend. This year the price doubled in comparison to the previous season from 150 to 350 Euro per ton. French are satisfied with the season results.
Besides the local demand, traders regularly get demand from abroad. The problem is to meet it. According to the French, the international demand is greater due to the shortages suffered by Dutch exporters. There is a high demand for sizes 60/80 and 40/60.
Spain: high demand rises price.
The harvest in Spain left behind higher figures of the past two seasons. The demand for Spanish onions is quite high due to the plenty of large sizes and perfect quality coupled with the shortages in other countries of Europe. This causes perfect prices for the onions from storage - up to 0.40 Euro per kilo. Local producers appreciate this season as the best they have known. One of the reason, they name, is a mild weather conditions without heat waves like it was last year.
To meet the great demand for Spanish onions traders have started importing from New Zealand, South America and South Africa. Exporters, on the other side, are worried about the closing of the Senegalese border for Dutch onions, as Senegal is an important market for them. In this case, Spanish traders fear an overstock of Dutch onions in Europe in the next season.
Owing to the season’s result, the onion acreage is expected to be expanded. That of the first early onions is already around 10% greater than last year. The harvest of these fields starts in April/May. For the middle and late onions, it is still too early to say anything definitive.
US: changes seem to be round the corner.
The onion market stocks stay stable, but changes seem to be round the corner. There is enough red and yellow onions in the Northwest, but shortages of white onions have been reported. White onion quality was not good, so farmers sold the stocks in the early season. Last year, the situation was different and many growers waited too long to sell, causing the market to collapse. The volume of white onions looks to be lower this season. Mexico & Texas producers also report about a smaller harvest of white onions.
In other regions of onion growing, such as Michigan, New York, Wisconsin and Canada, the forecasts are not optimistic as well. Due to the heavy rain at the end of the summer, the harvest is disappointing.
The market is stable because of the low demand. Usually, the drop of demand starts by the end of January or beginning of February. The waiting increase of demand is expected from abroad, from such countries like Mexico and the Netherlands. The demand rise will immediately reflected in the price. A trader says that the price of white onions, which currently stands at 25 dollars, could easily rise by 10 dollars.
Price stays on the high side now, though that could change in a moment. Price for the red onions, balance from 4 to 7 dollars, depends on the market trends. Currently, it trends between 5.50 and 6 dollars, this is closer to maximum.
Mexico has started shipping yellow onions, though the peak won't be reached until March. In the US, there are 2 million bales of onions less in storage. The demand in Michigan, New York, Wisconsin and Canada is expected to rise in March, when this regions will have nothing left in storage. In recent years, these areas make do with local stocks.
Australia: exporters are looking for new destinations.
One of the largest producer in South Australia reports about a smaller harvest than last year. The main reason of worse crop is the bad weather conditions: the strong winds and the persistent drought. According to reports, there have been no issues with diseases. Given the significant planting of short, medium and long day onions, the harvest will probably last until March.
The local market was overfull last year, so producers and traders concentrated their efforts on the overseas market. The sector has launched various initiatives to further invest in this field.
China develops the European export.
The onion market in China is currently perfect. In early 2018 prices were slightly lower. At the moment, the demand for Chinese onions has improved in the second part of the year given the problems in Europe. Now, plenty of onions are being exported to Europe, although the Southeast Asia stays an important market for Chinese onions. The main export variety in Europe is the yellow onion. The demand for red onions is lower, because it is exported to Europe from India. Onion prices are higher than those fixed around this time last year. The rising demand & increase of shipping costs from the port of Qingdao to Rotterdam caused the price growth. The Chinese New Year created the onion lull, but shipments have been resumed in the middle of February.
Kyrgyzstan is looking for a new market.
Kyrgyz onion growers are looking for new markets since neighboring Kazakhstan and Russia have increased their onion productions. Recently, Kyrgyz onions had occupied a good position in these markets, but now they have to give up that place to local farmers. So the exporters are searching for new export directions. Most of them see opportunities on European market.
Russia starts exporting to Europe.
While onion prices hit record numbers worldwide, the situation in Russia is quite opposite. Though onion price is 9% higher than those at the same period of the previous season, it still stays rather low in comparison with European countries. In the end of 2018 Russia started exporting onions to Europe being one of the biggest importers before. This fact impressed European producers very much. Poland became one of the first exporters of Russian production in the end of the year.