Spain: Oversupply drives onion prices down 25%

In late August, the new Grano de Oro onion harvest, also known as Reca onion, started in Navarra. The weather, with mild temperatures and little rainfall during the spring, has favoured an increase in the yield, leading to an oversupply in the market, as it already happened with potatoes.

"Despite the fact that this year's harvest has an unbeatable quality, prices remain low and are around 25% lower than last season," says Beatriz Marchite, of the commercial department of Cebollas Marchite. "The increase in production in Spain and in the rest of Europe is significant and, additionally, the quality is also high for everyone, which results in greater competition." 
Beatriz also stresses that, in addition to the campaign's specific circumstances, at this time there is usually some oversupply in the market, as there are still some Medio Grano onions in storage from the early season. "Many producers are also quick to introduce produce damaged by hail or diseases; thus, the market is too saturated at this time," she adds. "We hope the situation will change after September."

Cebollas Marchite sells its onions both in Spain's wholesale markets as well as in Germany, the UK and Portugal, mainly. The domestic market normally prefers medium calibres, while Portugal demands smaller sizes, which are reaching lower prices at the moment.

According to Beatriz, what makes Spanish onions stand out from those of other origins is their large size and attractive and uniform appearance; qualities that facilitate their sale in Europe. However, smaller sizes are harder to distribute. "This year we have been looking for contacts in Brazil, where the quality of Spanish onions is appreciated, especially when it comes to smaller sizes, which gives us an interesting opportunity," she affirms. 
"Unlike for the early Medio Grano onion, long shipments by boat entail no problems for the Grano de Oro, provided a good handling in terms of both harvest and storage was made. Additionally, they are harder and have a thicker skin," she continues. 
Cebollas Marchite currently packages its onions in bulk for wholesale markets in 15, 20 and 25 kilo formats. Next year they expect to start packing in nets and Buties to be able to work with supermarkets.

Source Fresh Plaza

Publication date: 9/15/2014