Summary
Senegal remains a growing market for Dutch onion exports, despite a major expansion of commercial onion production in Senegal. Dutch onion exporters are beginning to invest in local onion production for the local market, in part linked to the growing importance of wider West African markets for Dutch onion exporters
West Africa continues to be the major market for Dutch onion exports. In November 2016 it was reported that for the Dutch onion sector, markets in ‘Senegal, Mauritania and Ivory Coast are keeping the export motor running’. (1) Fully 95% of Dutch onion production is exported, (2) with Dutch traders also acting as intermediaries for other EU produced onion exports.(3)
The Netherlands ‘is the largest exporter of onions in the world’. In 2015 ‘sales on foreign markets amounted to 1,066 million tonnes’, with Senegal being the single largest extra-EU market for Dutch onion exports, at an estimated 154,600 tonnes. (2) Over the 2015-16 winter season Dutch onion export volumes increased 22.6%, with Senegal once again the top market. (4)
Dutch exporters however recognise that shortly ‘Senegal will start working with early import quotas’. While it was acknowledged that onion exports were currently high, it was recognized that the government of Senegal would ‘intervene in time to avoid market glut and thus prevent overlap with the local harvest’. This creates a situation for Dutch onion exporters where ‘the second half of the onion season is currently unpredictable’, with limited market opportunities being identified. (1)
The use of seasonal quantitative restrictions in the onion sector has been a contested area of trade policy in Senegal for a number of years, with onion importers complaining about the impact of such restrictions on their businesses.(5)
However this needs to be set against the phenomenal expansion of Senegalese onion production over the past 12 years. Between 2004 and 2014 commercial onion production in Senegal increased from 40,000 tonnes to 260,000, with this commercialisation of local onion production in part being assisted by the extension of financial support to the onion sector under the 10th EDF.(6) In 2015 plans were announced to expand domestic onion production to 350,000 tonnes, with Senegalese onion producers requesting a ban on imports. (7)
Dutch Extra-EU Onion Exports (tonnes) and % share extra EU exports (070310)
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | % share 2015 | % growth 2010-15 | |
| Total extra EU | 666,968 | 632,703 | 714,858 | 694,141 | 708,470 | 847,080 | +27% | |
| – Senegal | 133,338 | 145,191 | 132,974 | 160,915 | 146,161 | 153,608 | 18.1% | +15.2% |
| – Ivory Coast | 4,658 | 66,188 | 62,463 | 77,503 | 66,845 | 95,501 | 11.3% | +1,950% |
| – Guinea | 34,911 | 36,505 | 50,499 | 46,099 | 46,849 | 52,889 | 6.2% | +51.5% |
| – Mauritania | 33,226 | 35,636 | 45,192 | 40,764 | 42,601 | 44,994 | 5.3% | +35.4% |
| – Sierra Leone | 7,554 | 10,582 | 14,252 | 17,081 | 18,473 | 18,888 | 2.2% | +150% |
| – Mali | 4,617 | 3,969 | 4,854 | 8,772 | 13,032 | 16,864 | 2.0% | +265.3% |
| – Gambia | 15,824 | 12,073 | 12,649 | 10,970 | 14,737 | 14,530 | 1.7% | -8.2% |
| – Liberia | 6,751 | 5,857 | 7,585 | 6,794 | 7,554 | 9,089 | 1.1% | +34.6%% |
| Other West Africa | 5,477 | 6,461 | 7,786 | 10,466 | 9,361 | 12,209 | 1.4% | +122.9% |
| Total West Africa | 246,356 | 322,462 | 338,254 | 379,364 | 365,613 | 418,572 | 49.4% |
Source: EC, Market Access Data Base (EU member state- Netherlands, Product Code- 070310, Partner country- All)
This expansion of local production has not only been supported under the EDF, Dutch companies are also investing in onion production in Senegal for the local market. The Netherlands Enterprise Agency has stressed how investment by the Dutch company Van Oers United in onion production in Senegal, ‘not only contributes to employment, but also helps Senegal in striving for self-sufficiency’. This investment includes a packing station and warehouse and is complementary to the production of other vegetables in Senegal by Van Oers United for export. (8) During the rainy season Van Oers United also imports onions into Senegal, indeed this import trade was the foundation of its initial engagement in the Senegalese onion sector. (9)
Senegal continues to be ‘a gateway to the African market’, for Dutch onion exporters, particularly once seasonal import restrictions are lifted from 22 August. (10) In all West Africa took 49.3% of total extra-EU onion exports in 2015 compared to 36.9% in 2010 (see table).
Sources:
- Freshplaza.com, ‘Good demand for onions, but mostly from the same quarter’, 15 November 2016
http://www.freshplaza.com/article/166664/Good-demand-for-onions,-but-mostly-from-the-same-quarter - freshplaza.com, ‘The Netherlands exports record volume’, 15 January 2016
http://www.freshplaza.com/article/151848/The-Netherlands-exports-record-volume-onions - FH Trade, ‘The Netherlands is the largest exporter of onions in the world!’, 5 August 2016
http://www.fhtrade.eu/en/jcontent-3/299-the-netherlands-is-the-largest-exporter-of-onions-in-the-world.html - freshfruitportal.com, ‘Dutch onions notch winter export record’ 29 July 2016
http://www.freshfruitportal.com/news/2016/07/29/dutch-onions-notch-winter-export-record/ - Agritrade, ‘Senegalese onion import regime challenged’, 17 August 2014
http://agritrade.cta.int/Agriculture/Commodities/Horticulture/Senegalese-onion-import-regime-challenged - freshplaza.com, ‘Onion sector booming in Senegal’, 1 May 2014
http://www.freshplaza.com/article/120422/Onion-sector-booming-in-Senegal - freshplaza.com, ‘Senegal aims to be self-sufficient in onions by 2016’, 26 January 2015
http://www.freshplaza.com/article/134310/Senegal-aims-to-be-self-sufficient-in-onions-by-2016 - RVO.nl, ‘Dutch grower cultivates onions in Senegal for local market’, 25 February 2015
http://www.hortidaily.com/article/15478/Dutch-grower-cultivates-onions-in-Senegal-for-local-market - 9.agf.nl, ‘Van Oers United bedient lokale uienmarkt in Senegal tijdens regenseizoen’, 11 August 201
- http://www.agf.nl/artikel/144674/Van-Oers-United-bedient-lokale-uienmarkt-in-Senegal-tijdens-regenseizoen
- Freshplaza.com, ‘Overview global onion market’, 19 august 2016
http://www.freshplaza.us/article/4762/OVERVIEW-GLOBAL-ONION-MARKET
| Comment and Analysis Trade policy tools have been actively used in Senegal to effectively promote an expansion of domestic onion production. However the use of these trade policy tools could be brought into question by the provisions of the EU-West Africa EPA dealing with the ‘Prohibition of Quantitative Restrictions’ (see box).If these provisions were rigorously enforced, the government of Senegal would not only be called upon to abandon the use of seasonal import restrictions in the onion sector, but also similar controls in the sugar and poultry meat sectors. These are both sectors where African markets are, or will shortly become, of growing importance to EU exporters.
Overall West African markets have taken on growing significance for the Dutch onion sector. The expansion of onion exports to West Africa greatly assisted the Dutch onion industry in adjusting to the loss of the Russian market. Whereas in 2010 the Russian Federation had taken fully 23.9% of extra-EU Dutch onion exports (159,482 tonnes), by 2015 this had fallen to only 2.2% (18,754 tonnes). Indeed it can be argued, it has been West African markets which have saved the Dutch onion sector, with the expansion of exports to West African more than compensating for the loss of the Russian market. We thus find a growing dependence on ACP markets for exports of specific products from individual EU member states. This underlying trade reality highlights the value of the EU-ACP trade relationship to certain EU agro-food exporters. The kind of investments undertaken by the Dutch company Van Oers United in onion production in Senegal, is indicative of the type of constructive investment engagement required from EU agro-food sector companies, as African governments seek to expand their agricultural base to meet rapidly growing domestic demand. This kind of EU corporate engagement highlights the positive role which can be played in reconciling EU export interests with African aspirations for the structural development of their agricultural base and wider agro-food sector. |
| key words: Onions, Senegal, Holland
Area for Posting: Horticulture, West Africa EPA |