US Onion
The 2019 onion crop harvest is about 30% complete in the desert region of Southern, CA. The crop is slightly late in maturing, due to the cooler and wetter spring this season. However, crop yields are normal.
The organic harvest was completed in mid-May. Crop yields have been normal till date. Due to wet weather, the Tulelake planting started late resulting in a slightly reduced crop.
Late May saw a series of thunderstorms over most of Central California and Westside regions. The unseasonal showers and hail adversely impacted the crop in some areas, especially in the Westside of the San Joaquin Valley. The weather has since stabilized by the end of May. The overall US onion crop for dehydration is now expected to come in ~3-5% below plan, assuming no more unfavorable weather events. Market demand, which began on a soft note in Q1, has seen a pickup in April and May. Pricing has largely been stable.
Egyptian Onion
Egypt’s CY 18-19 winter yellow onion crop is now fully harvested and mostly sold/committed at this time. The summer crop planted acreage is reportedly up 15-20% over last year and harvest will commence shortly. Fresh onion demand saw a spike towards the end of Q1, 2019 primarily from Turkey and Europe and caused Egyptian fresh onion prices to move up sharply for some time. This was driven mainly by the 40% reduction in the fresh onion crop in Europe late last winter. This sentiment has now returned to normal for the time. Olam Egypt’s white onion harvest has also commenced and is proceeding normally.
Other Origins
India’s 2018-19 Kharif (winter) white onion crop planted acreage is reportedly down ~30-40% over last year. This is a direct result of high carryover inventories and extremely low prices for fresh onion in the last season. Both fresh and dehydrated onion prices have seen a sharp increase in the last 2-3 months leading to some shipment delays and more quality related rejections.
Future Outlook
USA
Egypt
Other Origins
California Garlic
The 2019 California garlic crop plantings were completed last fall at planned levels. Planting was carried out smoothly and the crop was progressing normally till late May. The second half of May however saw unseasonal thunderstorms and hail which impacted Central California and struck a portion of the garlic crop. Growers are actively managing the fields to minimize any potential damage caused by water or hail. As the crop is still at an intermediate stage, the full extent of the adverse weather will only be known towards the end of June. At this time, crop estimates remain unchanged. The harvest is still scheduled to start by early July.
Most destination markets have adequate coverage through end of Q2/Q3 2019 and buyer interest is currently lukewarm. Destination market prices have remained range-bound and are not fully reflecting the increased CY19 crop pricing at the moment.
Chinese Garlic
China’s CY19 crop harvest has commenced in regions which have planted early variety garlic. Overall yields are reportedly better than last season, but planted acreage is clearly down by ~30%. Fresh garlic prices have doubled over CY18 levels and open market flake prices are up over 60% from 2018 levels. Carry forward flake inventory from CY18 is estimated at ~0.5M MT and the likelihood of new crop flake production is extremely remote given the elevated fresh garlic prices. Chinese market sentiment is extremely bullish, and speculators are actively covering of open market flake at the moment.
Most destination markets have adequate coverage through end of Q2/Q3 2019 and buyer interest is currently lukewarm. Destination market prices have remained range-bound and are not fully reflecting the increased CY19 crop pricing at the moment.
Future Outlook
California
China
Please reach out to your Olam Spices Sales Managers to understand more about how CA premium garlic as well as CA Economy garlic can help you reduce costs and help you secure coverage.
** Olam CA Premium garlic has ~3 times higher sulfurous aroma compounds than Chinese premium garlic. This enables Olam CA premium garlic to deliver superior flavor, stronger aroma and better roasted and caramelized notes, than Chinese garlic. Olam CA premium garlic can therefore generate significant cost-in-use savings through ~25-50% reduction in inclusion rates relative to Chinese premium garlic across a wide range of applications (sauces, dairy, topical and meat seasoning).