Tridge interviewed Rocio Martin Morales, the CEO of Lionfenix Global Business, to gain insight. Rocío Martínexplained that onion demand in the foodservice industry has been slow. However, domestic consumption has improved due to the effects of COVID-19.
“Onion demand from restaurants and hotels has been better this summer than the rest of the months but is still slow. Large-sized onions are supplied to the foodservice industry. However, since the restaurant industry has been closed, medium-sized onions, preferred in households, have been popular this season,” stated RocíoMartín.
The Netherlands ships record volumes
Despite declining exports during the second half of the 2020/21 season, Dutch onion exports exceeded expectations, reaching record export volumes. Export volumes exceeded 50K tons per week, surpassing the previous record of 40K tons per week. The Dutch onion season began well during the first half, followed by a steady decline in shipments towards the end of the season.
"Domestic onion production in the Netherlands has been good, and this has boosted exports. The Netherlands produces high-quality onions due to its meticulous quality control measures. Onion quality is monitored daily. There is competition between the Netherlands and Spain in searching for new markets. Dutch onions have put pressure on all markets as the Netherlands also competes with India in the African and Middle Eastern markets. In 2021, the planted area has also increased considerably in the Netherlands, as well as in Belgium," stated Rocío Martín.
Increased production in Spain
Grano onions are currently being harvested in Castile-La Mancha. Andalusia's onion production has seen a marked increase this year. According to the Spanish Ministry of Agriculture, Fisheries, and Food, the onion acreage in Spain has risen by 24.4% compared to 2020. This increased supply has pushed La Mancha onion prices down. Andalusia experienced around 15 days that affected harvesting due to the rains and bad weather, causing stored onions to overlap with the new ones from Castile-La Mancha.
"Castile-La Mancha is the top onion producing region in Spain and one of the most vital in the EU. Production in the region has been affected by high temperatures due to global warming," explained Rocío Martín.
Spanish onions are currently in a difficult position due to limited onion demand in the EU since the foodservice industry has not yet fully recovered. Some of Spain's major markets, such as Portugal, have increased their onion production and extended their campaign. When Andalusia's onion season began, onions were imported from third countries, mainly large sizes from Chile and small and medium sizes from New Zealand. All these factors have caused Spanish onions to go through a difficult season.
Logistical problems hamper the Chinese market
The cost of peeled onions on the Chinese market has increased by USD 200 per tonne compared to the previous year, reaching USD 600 per tonne in 2021. The factors fueling this price increase are; the expansion in onion planted area and domestic market demand in the country, the percentage of onions suitable for export being lower than usual and pushing the price of top-quality onions higher, and the recent appreciation of the Chinese yuan. The shipping cost for the Qingdao to Europe route increased to USD 8500-USD 9000 per container in July. There have been severe delays at Chinese ports, leading to a backlog. In certain cases, products have been delayed by 10 to 15 days.
“There has been a shortage of containers in China, raising the need for freight companies to return empty containers to China. This container shortage has pushed Chinese freight costs high, to the advantage of the Netherlands and India. Freight costs doubled in February and March. This season, China has focused on nearby markets in Asia and the Middle East,” stated Rocío Martín.
Sources:
- Holland Onion Association. “a good year for onion lovers.”
- Tridge. “Overview of Dutch Onion Exports.”
- Fresh Plaza. “GLOBAL OVERVIEW ONIONS.”
