The state of US onion exports this season is a story of challenges and opportunities, as shared by Stu Follen of SL Follen Company. Despite facing hurdles, the industry is making strides in foreign markets, driven by favorable factors that are helping regain sales traction compared to the previous season.
One notable factor contributing to improved export conditions is the combination of lower FOB (Free on Board) prices and reduced ocean freight rates. This dynamic duo has sparked increased interest from foreign buyers for US onions. However, it’s not all smooth sailing, as the strong US Dollar continues to pose challenges for exporters.
In traditional Asian markets, onion purchases are steady, albeit with moderate volumes. Stu Follen notes, “Traditional Asia markets are buying onions, but volumes are not big. However, the inquiries are steady and sales are being made weekly.” Notably, there’s a significant exception to this trend as Taiwan, traditionally an active buyer of US jumbo yellow onions, is conspicuously less active this season. Delving into this anomaly, Follen observed, “After checking this market, we are seeing large volumes of Vietnamese onions now being sold in Taiwan. This is somewhat startling because Vietnam is a very minor producer of yellow onions. However, their northern neighbor, China, is the world’s largest producer. Taiwan is not allowed to import Chinese-grown onions… Seems pretty clear what is happening.”
The resilience of the onion export industry extends to niche markets as well. Panama, in particular, has shown strong interest recently, with Follen noting that Panama was very active early in July and August. However, rule changes in Panama led to a temporary halt in sales for approximately a month. Now that this market is open again, it is expected to remain active for an extended period.
Shifting attention to other onion production areas, Europe has grappled with tough growing conditions during this season. The situation is characterized by fluctuating weather patterns, marked by cycles of heat and rain. The repercussions of these conditions include a significant impact on onion sizing, especially in major production areas like Spain and Holland. As a result, prices in Europe have remained unseasonably strong and high, and there is an anticipation of relatively shorter supplies of large onions in the European market this year.
The US onion export industry stands at a crossroads, balancing challenges and opportunities, and demonstrating resilience in the face of adversity. As the season progresses, exporters will continue to navigate the complexities of global markets, adapting to changing dynamics while seeking new avenues for growth.