The global onion market is currently in a tumultuous situation in many markets, for the most part due to the unpredictable weather in production countries. In the Netherlands, despite high prices, concerns linger about the quality of Dutch sowing onions and unpaid invoices from the previous season. Germany anticipates a below-average onion harvest, primarily due to delayed early summer harvests and the prospect of increased oversized onions. Austria grapples with lower harvest levels and widening price spreads, making export markets less accessible. France, while enjoying a promising onion season, faces potential shifts in demand as other countries, like India and Spain, encounter harvest difficulties. Italy, hit by poor weather, witnesses a significant drop in onion production but benefits from higher prices. In Spain, the demand for onions surpasses supply, driven by low stocks and export opportunities.
Egypt imposes a temporary ban on onion exports to stabilize skyrocketing local prices, while South Africa deals with fluctuating onion prices influenced by past oversupply issues. China reports stable onion prices after experiencing earlier surges in demand, and North America kicks off its fall onion harvest with overall good quality expectations and steady consumer demand. Amidst these diverse scenarios, the global onion market remains in a state of flux.
Netherlands: High price, but quality concerns for Dutch sowing onions
Onion yields in the Netherlands vary sharply. The price is at a high level with a bale price close to 50 cents, but packers say not all invoices from last season have been paid yet, making the trade cautious. Also, as a result of the high prices, there is competition from other onion-producing countries such as China on destinations in the Far East. On the bright side, sea freight costs to Asia have fallen sharply. In terms of red onions, supply is completely limited and prices are extremely high. Packers warn about the poor quality of sowing onions, but do see prospects for the second half of the season when the bad onions are off the market. "It could well be that after New Year a high price will be paid for good quality onions. That seems a very likely scenario to me at the moment, but I cannot give any guarantees either."
Germany: Below average onion harvest expected
Onion growers in Eastern Germany are expecting a below-average harvest this year. The harvest is not yet finished, but the first results are already becoming apparent, said a spokesman of the Mitteldeutsche Zwiebelkontor, the largest grower association in central- and eastern Germany. However, it is still a few weeks too early for a final balance.
Due to a lot of rain the harvest of the early summer onions in the western growing regions started late, however, the later stock was harvested on time. Overall, bruto yields will be normal, but traders expect an increased share of oversized onions over 70mm. On the long-term, there is a slight expansion of the acreage for yellow summer onions.
Austria: Lower harvest expected
Even if rainfall interrupts the onion harvest for a short time, it will be possible to complete the harvesting work in Austria over the next few days. The overall result is expected to be below last year’s level. Domestic marketing is quiet, while export business is taking place on a small scale, as the price level of the goods is often too high for export markets. An ever increasing price spread can be observed in the producer prices. At the beginning of the week, depending on the quality, mostly between 45 - 50 euros/100 kg were paid for medium-sized onions cleaned and sorted in the crate. Small-sized goods and weaker lots do not come close to this price level, while the prices for the rare large-sized onions are significantly higher.
France: Season starts with high prices
Although the 2023 yellow onion season is shaping up to be better than last year's, "which was catastrophic in terms of volumes and prices. This season has got off to a complicated start,” according to one operator. “French production this year is experiencing good yields. Most sizes are medium, with few large ones. On the market, however, prices are currently very high." Growers are delighted with the high prices, but the trend could be reversed sooner than expected, given the situation in other countries. Some of them are encountering serious difficulties with their harvests. This is the case in India, for example, where yields are down this year. The government has therefore introduced a 40% tax on all products crossing its borders. African and Asian markets, which usually source from India, could then turn to France. The situation is similar in Spain, where the drought has caused a catastrophic start to the season. The onions are very damaged and for the most part destined for industry. The situation is the same in the Netherlands, but this time due to bad weather. Growers were forced to sow later than usual, and the cold weather that followed in May caused a delay in vegetative growth. In view of the situation, countries with production problems could turn to France.
Italy: Poor weather causes up to 50 per cent drop in onion harvest
Estimates for onion production are down by 50 per cent for yellow and 40 per cent for white and red. This is a figure given by a large trader in northern Italy who also imports from abroad. The weather in 2023 is the main cause of this drop in production. At the same time, prices are very high, with an average of €0.95-1.00/kg for packaged onions leaving the processing plants.
Fortunately, wireworms are less prevalent than in 2022, so the average quality is higher. The trader says that yellow onions are also the most in short supply abroad. Moreover, prices are rising for Italian importers: from Austria, for example, 1 kg of loose yellow onions costs €0.70, excluding transport and processing.
Fresh onions, in all their varieties, are bought at least once a year by almost 20 million Italian households. The organic segment is not particularly successful; it is possible that consumers do not perceive the added value, given that the average price is around 60% higher.
Spain: Demand for onions has been outpacing supply since July
“Prices have remained firm until now, with the grower being paid between 0.40 and 0.50 €/kg for onions depending on sizes. Stocks have remained low, especially since April, since cold storage stock ran out and there were very few onions planted in temperate areas such as Andalusia. From that moment on, stocks have been very small and practically everything that was harvested in the different areas has been sold quickly despite the high prices. In July there was a small break in this inertia coinciding with the harvest of the medium grain onion in Ciudad Real, but then, at the end of July, there was a gap in the supply due to the shortage of onions due to a strong mildew infection," explains an industry operator.
“Prices rebounded and demand has been outstripping supply ever since. It must also be said that, due to the delay in the European harvest, a lot of onions have been exported, for example to the United Kingdom, during the summer," which also contributed to the fact that stock has not accumulated.
In relation to storage, uncertainty is quite high at the moment. “How the last rains in September will affect the quality and storage capacity is still unknown. It must be taken into account that in the Madrid area, in the north of Ciudad Real, in Toledo and although to a lesser extent also in Cuenca, the storms devastated a large area and those onions will not be suitable for storage.”
Egypt: Government announces 3 month ban on onion exports
On Wednesday, September 20, the Egyptian government announced a 3-month ban on onion exports, justifying it by skyrocketing prices in the local market. According to the government-owned media Al Ahram, The price of onions has soared to EGP 35 per kilogram in some local markets across Egypt, up from EGP 27 last month and EGP 12 a year ago.
According to an Egyptian exporter, the increase in prices on the domestic market is due to several factors, including the reduced acreage in Egypt this season, the global shortage of onions, and the devaluation of the Egyptian pound. The exporter says, "Onion prices were high as soon as the beginning of the season, due to lower acreage in Egypt, followed by an increase in global demand, as the onion market was shaped by higher prices and lower production worldwide. The wholesale prices started at around 400 USD Ex Works per tonne at the beginning of the season, then rose to around 600 USD per tonne this month."
The exporter adds, "In the immediate term, the decision will stabilize onion prices on the domestic market. This will help improve the prices next season, as stable prices now mean that next season will start with competitive prices. In addition, the acreage of onions in Egypt will be higher next season, given the high demand at the global level and the irregularity that increasingly marks European and global onion production."
Another Egyptian onion exporter said that spring onions, for which the season has just begun in Egypt, are not affected by the export ban.
South Africa: Prices for onions highest ever in May
Onions are currently lifted in the Brits area (North West Province) and in Limpopo; the Northern Cape will come in next from the middle of October. The Western Cape, the only area that exports, usually gets going in January.
Price were really high this year, often R80 (4.2 euros) and higher for a 10kg bag; Limpopo farmers had burned their fingers last year with oversupply and low prices and they planted conservatively this year – if only they could have looked into a crystal ball: in May prices were the highest ever, up to R160 (8.5 euros) per 10kg bag.
Onion prices quickly came down but even the prices from July and August were well higher than 2022.
"There were farmers who said they’d never received R90 [4.7 euros] for a 10kg bag before so some lifted their onions a bit greener which had shelf-life complications,” says an industry source. It heaped up at the market for a bit and brought down prices.
The price per kilogram is now R6,88 (0.36 euro) for 10kg onions (R9,24/kg for 3kg bag onions), still significantly higher than usual prices this time of the year.
Loadshedding (power cuts) affects the number of hectares that can be irrigated and pumps that can be working. Farm workers have to get up at all hours of the night to get the irrigation going when there is electricity.
China: Prices have come down, market stabilised
Prices for China’s domestic onions have been comparatively high, with exports surging during this year’s spring and early summer months. “That said, since the end of summer, prices have come down and are currently stable,” according to an onion grower and exporter from Shandong. “There was a madness in demand for Chinese onions earlier in the season. Lately, I have been asking for lower prices as the market seems to have stabilised. We also heard that prices for Dutch onions have come down.” The quality of the onions is good, and all harvesting has been completed. Weather conditions have not noticeably affected the crop. Labour is and remains a major problem: “It is difficult to find workers for the farms, and labour prices are very high. This might affect the export and delivery of onions from China. Even at double pay, we struggle to find farm workers.” Overall, however, there is general satisfaction with the 2023 summer season.
North America: Some regions see later start to fall onion harvest
The new crop onion supply is steady and is ramping up as fall harvest gets underway. In regions such as Wisconsin, supplies currently are softer than last year at this time due a lack of rainfall in the early summer months, says one shipper. That in turn pushed back the crop to start mid-month instead of the first week in September when the region normally gets into production.
Wisconsin is adding to a good crop coming out of regions such as the Northwest which also has great yields and good volume on all sizes. “I think the overall national crop will look great quality-wise. Everything is sizing up better than expected,” says the shipper.
As for demand, it continues to be steady. “Consumers steadily consume onions throughout the year,” says the shipper. At the same time, customer demand for local crop onions coupled with the holidays coming up will also add into that demand.
All of this leaves pricing as fair, though pricing is slightly higher right now compared to last year at this time. That’s expected to come down in a month or so.
Next week: Global Market Overview Apples!