Stu Follen, a respected leader in the onion export industry and friend of OnionBusiness.com, has shared essential insights into the current state of U.S. onion exports. Stu’s analysis sheds light on the challenges facing Pacific Northwest (PNW) onion exporters in 2024, a year marked by one of the slowest export seasons in recent history. While PNW onions traditionally see steady export from September through February to markets in Japan, Taiwan, Hong Kong, Panama, and occasionally Korea, the strength of the U.S. Dollar has significantly impacted competitiveness, creating hurdles for American onions abroad.
Market-Specific Export Challenges
Taiwan
Historically, Taiwan is a small but reliable market, importing 30-40 containers per week. This year, however, Taiwan has been notably quiet, with only a slight uptick in demand in early October. The factors contributing to this downturn include:
- High U.S. Dollar: U.S. onions are more costly, pushing Taiwanese buyers toward Dutch alternatives.
- New Zealand Inventory: New Zealand, unable to export to Europe due to Gulf conflict-related shipping issues, redirected surplus onions to Taiwan, saturating the market at reduced prices.
- Chinese Imports via Vietnam: Due to Taiwan’s restriction on direct Chinese imports, onions are now entering Taiwan via Vietnam.
Japan
The strong dollar has impacted exports to Japan, where the effective cost of a $10 bag of onions now exceeds $15 due to unfavorable exchange rates. Consequently, Japan is importing more affordable onions from China and Europe. While U.S. onions maintain a small presence in Japan, export volumes are notably down.
The real cost of a $10 per bag onion delivered into Japan and the effect of strong USD
-Today Y152 = 1 USD $15.20 per bag
-2023 Y142 = 1 USD $12.67 per bag
-2022 Y112 = 1 USD $10 per bag onion
Panama
Panama remains a high-risk destination due to fluctuating government policies that can change import rules without warning. This unpredictability, coupled with existing demand, has increased the risk for U.S. exporters, making it a challenging market.
Hong Kong
Historically a steady market for PNW onions, Hong Kong is now sourcing more affordable onions from China, making it difficult for U.S. products to remain competitive given currency exchange pressures.
Korea
Korean demand is more variable, driven largely by fluctuations in domestic crop performance. Recently, there has been interest from Korean buyers, but specifics on volumes remain unclear.
The Big Picture: A Globalized Onion Market with Currency Challenges
Onions continue to be the most globally traded vegetable crop, providing valuable export opportunities for U.S. producers. However, with the U.S. Dollar at a high, foreign competitors are capturing larger shares of the market, creating a challenging export environment for American onions. Stu Follen emphasizes that until the U.S. Dollar normalizes against major global currencies like the Euro, New Zealand Dollar, and Chinese RMB, American onion producers will struggle to maintain their market share overseas.
OnionBusiness.com extends its heartfelt thanks to Stu Follen and SL Follen Company for their insights and expertise on offshore onion exports. We hope to see an improved export landscape for U.S. onions and a balanced market that enables PNW growers to thrive on the global stage.
Stuart Follen
SL Follen Company
7380 SW Kable Lane
Portland, OR 97224
