While prospects for the new onion harvest in Europe are positive, there are also some concerns in the background. British producers are experiencing a dry summer; French growers suffered the impact of heavy rains in March and the Dutch sector hopes for prices not to become too high, so that the world market remains attractive. This international market is difficult for Panamanian growers, as they are unable to compete with imported onions, although some measures should help. Brazil, for its part, could do with some new partners after the halt of exports to Argentina, although it must be said that investments are also going in the domestic production. Chinese exporters still have plenty of onions in storage because of a great harvest in India. India exports to many destinations, including Malaysia and Indonesia, which are China's main markets. The Australian industry prefers to keep the border closed and is pleased with the guarantee of two supermarket chains that only Australian onions will be on the shelves.
Good Dutch season
Despite the high prices and poor quality of the onions, exports in mid-June reached the magic threshold of one billion kilos. Meanwhile, the new plant onion season is already well underway and the first seed onions have been harvested. The onion acreage has increased by 1.2 thousand hectares and amounts to 32.9 thousand hectares, which is 4 percent more than in 2015 and 65 percent more than in 2000. The area devoted to seed onions has increased the most. The largest share of the onions grown is intended for export.
The Dutch plant onion season has had a good start and demand in this period is even exceeding supply, because time is needed to dry, ventilate and sort the onions to make it possible to deliver a good export product.
The seed onions are hitting the market a bit later, so there is plenty of room for plant onions. At present, the price stands at around 20/21 cents and that is a great price. With the current exports, traders expect a fixed price. If more supply arrives soon, we will have to see how the market develops. The price should not become too high to remain competitive on the world stage.
There are currently considerable exports overseas and the quality looks good so far. More than 90 percent of Dutch onions cross the border to a wide range of destinations. With two international ports in close proximity, the Dutch sector is able to supply onions around the world in a short time.
Formerly, the majority of exports took place in the second half of the season, but partly due to the Russian boycott, this has now shifted to the first part of the season. Senegal, a gateway to the African market, will open its borders from 22 August, and with the celebration of the Tabaski festival of 11 September there are good prospects for the shipments to Africa. The global onion market looks quite different. Harvest volumes in India and China are good and the prices are not too high. Two years ago, Brazil saved the Dutch season, but currently the country is not on the market. Furthermore, the Netherlands faced a lot of competition in the Brazilian market from Spanish onions.
Belgian onion cultivation on the rise
Belgium is a real potato country, but the production of onions is also starting to increase. Both Flemish growers and producers in Wallonia will grow more onions, although there are no clear figures yet about the extent of this growth. Last year, the acreage stood at 2,450 hectares. Traditionally, Belgium has mainly cultivated for the processing industry. In the next few years, there will be more for the fresh market. Supermarkets are seeking local produce, including local onions.
According to Belgian growers/traders, this is a potential threat in the future for the Netherlands. The reaction of Dutch traders is currently a bit laconic, according to the Belgians, but the volume that is coming should not be underestimated.
The difference between Belgian and Dutch onions lies mainly in their appearance. The colour of Belgian onions is more golden or tanned. Belgian growers are rapidly gaining experience and they are increasingly able to serve the market with their 'own' product. Packaging is still a bottleneck. According to traders, Belgian onions are still often packed in the Netherlands only to end up again in Belgian supermarkets.
Currently, the market is stable; it is still a holiday period. Prices are quite acceptable, according to a Belgian wholesaler. He also confirmed the expansion in the onion acreage, which is already estimated to have grown by around 10% compared to last year. As regards plant onions, a lot of damage has been suffered in Flanders, although in Wallonia it has reportedly not been as bad.
Early start of the season in Denmark
The season is going well. The shallot harvest kicked off two weeks ago and next week will mark the start of the harvest of the first early onions. According to a Danish wholesaler, there will only be Danish onions available in the coming months. An average production volume is expected, perhaps slightly greater than last year's. The season started earlier than usual because of the warm weather and abundant rainfall. Typically, the onions are delivered to wholesalers in bags of 5 or 10 kilos. The consumer packaging typically has a weight of 300 grams.
Exports onions are stored until the New Year, when the export season starts. The main markets are Southern Europe, Germany and the Czech Republic.
British producers suffering from drought
The bulk of the British onion production can be found in the east of the country; a region which has lately been faced with challenging weather conditions. Unlike last year, it has been too dry and too hot. The growth of the onions is on track, but there is a shortage of water, reports a grower. The temperature is too high (24 °C-30 °C), which makes it difficult to ensure sufficient irrigation. An estimate of the harvest is therefore difficult to give. The yield is very dependent on the amount of water obtained, which may vary by field.
The growers need large calibres to get a good price, preferably between 50-80 mm. The harvest kicks off next month. The acreage remains stable and last year's harvest totalled 466,000 tonnes.
Demand is this period is traditionally lower, but sales are good, with reasonable prices. There is currently primarily a shortage of red onions. Spain exported some red onions and in the next two to three weeks shipments will start arriving from the north of the UK and Northern Europe.
Spain fears low prices
The harvest in Spain's most important onion growing region, Castile-La Mancha, is underway. Currently, the onions harvested are suitable for medium term storage. The onions for long storage will also be harvested soon. Despite the good results this year, supply and demand were out of balance. This resulted in a drop in prices in July.
The acreage increased by 4% this year, which combined with the favourable weather conditions has ensured a great harvest. The volume available is estimated to have increased by between 8% and 10%. Exporters are facing some challenges. Germany and the United Kingdom expect a bigger harvest, which will entail reduced export opportunities for Spain. Brazil also seems to be no viable alternative this year. Investments have been made to expand the acreage, so the harvest will be bigger. Other possible destinations include North Africa and Taiwan, but these are also tougher markets.
French harvest uncertain
The harvest should start in just about a month, so it is difficult to give a good indication of how the season will develop; however, there are concerns that the heavy rainfall in March will lead to a smaller harvest and poorer quality. Besides the fact that fields were under water, there were problems with the appearance of diseases and mildew in the damp fields. Whether this will take a toll on the onions is still unclear.
The shallots harvest has already started, with approximately two-thirds already completed. The yield is good, but lower than last year's. About half of the French shallots are sold on the European market.
Russian crops expanding
The Russian onion production has grown steadily over the past two years, so between June and April a considerable share of the local demand was covered with domestic onions. More and more growers are using modern techniques. A large supermarket chain says to be satisfied with the improved quality of onions this year. This season is developing well, with plenty of onions for the domestic market. In the coming months, Egyptian onions will also hit the market. The Russian market has a stable year round demand for onions. The onions are sold loose or in bags of 0.5 or 1 kilo. The most popular variety is the Dayton. The price stands at around 16 rouble (0.25 dollars).
Room on Brazilian market
Argentinian onion exports are falling back. While in 2010 shipments still totalled some 250,000 tonnes, last year this figure dropped to 80,000 tonnes. This has created some room in the Brazilian market for other countries. In 2014, the Netherlands achieved an important position in this country, but last year Spain also managed to gain a good foothold. The country exported nearly 50,000 tonnes of onions to Brazil, which resulted in a slightly lower supply on the European market. Brazil is one of the world's top onion importers and has a market share of around 4%.
Imports negatively affecting Panamanian growers
According to Panamanian growers, the government is encouraging precisely the import of onions instead of promoting domestic crops. The growers are now preparing for the upcoming season. In the first half of this year, the country has imported 12 million tonnes of onions, while last year's total imports amounted to 35 million tonnes. In the months of January and February is when the most onions were imported. During those months, the local production can also easily meet the demand. Most imports come from the US, followed by the Netherlands and Peru.
The producer organization revealed that there were growers who wondered whether it was worth keeping the current acreage, given the high import figures. Nevertheless, the growers have started planting.
The country's production meets 90% of the domestic demand between January and April, while in the period between April and December imports become necessary, as the domestic production can then only cover 20% of the market's demand. Growers have organised protests against the import regulations. There have been some steps taken by the government, but it will be necessary to wait until next season to find out whether that is enough to take the pressure of the market. At present there is a shortage of onions and the ports of Panama are open to imports.
Rust in Colombian onions
An outbreak of Puccinia allii (rust) on eight farms in La Bella and La Florida has hit Colombia's onions. The fungus threatens not only onions, but also garlic and shallots. Eight companies have already reported damage. The authorities are carrying out inspections in the area and taking the necessary measures to prevent the spread of the outbreak.
Australian growers hope for good prices
In the coming weeks, the onion season will kick off in northern Australia, Queensland and the Northern Territory. The harvest of long-day onions in the south came to an end in mid-May. The onions are currently supplied from storage. Prices are rising on the domestic market, which will probably translate into a good price for the growers, probably better than in the six preceding years. There are fewer storage onions due to the unexpectedly hot weather during the season. Some growers in the north have already started harvesting small volumes of early onions and in the coming weeks the harvest volume will start to peak.
Two supermarket chains, Coles and Woolworths, have promised to sell only Australian onions. The industry hopes that more supermarkets will follow their example. According to the onion growers, imports are not absolutely necessary.
Low prices in China
The largest onion growing areas in China are the provinces of Shandong, Gansu and Inner Mongolia. Last year, the prices were high, at 2,000 yuan (265 Euro) per tonne. As a result, more producers decided to plant onions. According to estimates, the acreage in the provinces of Gansu and Inner Mongolia has increased by between 15% and 20%. In response to this, prices have fallen by 1,000 yuan per tonne. For now, no price increases are expected. The harvest in Gansu and Inner Mongolia starts in mid-August.
As regards exports, traders have been affected by the large harvest in India. The main export destinations are in South East Asia, namely Malaysia and Indonesia. This year, the cheap onions from India are taking market share form the Chinese production. Until June this year, China's exports stood at 265,000 tonnes, which is 8% below the 290,000 tonnes achieved last year.
Positive mood in the US
Growers in New York have not yet started with the harvest, but they do see a good demand for yellow medium and jumbo yellow onions from California. Washington also is preparing for the start of the season. The harvest in Orange County, New York, kicks off in September and the supply, quality and price are all expected to remain stable.
The harvest is currently in full swing in Idaho. This year, the onions are larger than last year. The season this year has so far been very good for the growers. Although the acreage has increased slightly, the yield has dropped a little. The prices are good for the time being, ranging between 9 and $ 12 per 50-pound bale of Super Colossal Spanish Yellow onions from Idaho and Oregon (on 18 August).
Prospects regarding the harvest are also optimistic in other states. The harvest in Washington is on track; Colorado has started the harvest of white onions and Michigan has had the "best crop in years" earlier this month. News from Utah is not as good, as onions there are smaller as a result of the hot summer.
