Summary
In a context where West Africa is the major destination for extra-EU Dutch onion exports, surges of Dutch onion exports to Mauritania are severely depressing local onion prices. This is in part linked to the closure of the Russian market. This could provoke trade restrictions in Mauritania in an effort to protect local onion producers. Any moves to restrict onion imports into Mauritania would need to be closely linked to targeted efforts to strengthen the functioning of local onion supply chains. Experience elsewhere in Africa, in a country facing similar environmental conditions, namely Namibia, could hold important lessons for Mauritanian onion sector trade policy.
At the end of 2016 it was reported the Dutch onion sector was facing difficulties, with prices at around production costs. This was leading Dutch onion producer/exporters to seek out new markets. According to press reports in April 2017, this situation saw exceptional levels of Dutch onion exports to Mauritania (1).
Reportedly Mauritania normally imports between 40,000 and 45,000 tonnes of onions annually, with monthly imports reaching around 4,000 per month around Ramadam and 3,000 per month at other times. For onions out of Holland, this trade is served by regular shipments by container every three weeks and a charter boat out of Vlissingen.
However in February 2017 it was reported this normal trade was supplemented by additional volumes which resulted in ‘a complete collapse of the market’ (2). This surge appears to have begun towards the end of 2016, with total imports from the EU (almost exclusively from Holland) reaching 51,058 tonnes by the end of 2016 (2), some 12.6% higher than in 2015 (4).
EU Onion exports to Mauritania 2011-2016 (tonnes) (0703)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
| EU | 35,636 | 45,192 | 40,764 | 42,802 | 45,335 | 51,058 |
| Holland | 35,636 | 45,192 | 40,764 | 42,601 | 44,994 | 51,052 |
| Belgium | – | – | – | 201 | 315 | – |
| Spain | – | – | – | – | 26 | 6 |
Source: EC market access data base http://madb.europa.eu/madb/indexPubli.htm
According to Peter Beemsterboer ‘the market is now being deliberately deluged, and sales prices are so low they don’t even cover overheads in Mauritania’. He noted how expanded sorting capacity in the Netherlands had created ‘an unhealthy competition’, which is seeing ever sharper prices being offered in an effort to clear stocks. This results in a situation where ‘the entire supply chain is losing money’ (3).
The situation is creating concerns that the Government of Mauritania will take action to block imports, so as to protect local onion growers. Representatives of J.P. Beemsterboer noted how a similar collapse occurred in Senegal in November 2016 when the market was flooded. The market situation only recovered when the Senegalese government ‘implemented a quota to protect their own production’. The overhang of imported Dutch onions has nevertheless seen locally produced onions in Senegal being sold at below cost.
More broadly in West Africa, despite a 4.6% decline in overall extra-EU Dutch onion exports in 2016, exports to West Africa fell only marginally by 0.05%. This saw West Africa’s share of extra-EU Dutch onion exports once again increase to over 50% of the total. The West African market has accounted for over 50% of total Dutch extra-EU onion exports in four of the last six years.
Amongst the seven main West African export markets for Dutch onions, in 2016 four showed increases, with Mauritania leading the way (+13.5%), followed by Senegal (+12.8%) Guinea (+4.8%) and Gambia (+2.8%), while three markets showed declines (Ivory Coast (-26.4%), Mali (-14.8%) and Sierra Leone (-8.3%).
According to press reports the situation facing Dutch onion exporters is unlikely to improve in the short term, with there being ‘very little confidence’ in any ‘revival in the market’. Traders have pointed out how in the past the second half of the season (the first six months of each calendar year) ‘was covered by demand from Russia’, however since the Russian import embargo introduced in August 2014, ‘there is no structural customer’ (3) (exports to Russian fell from 100,681 tonnes in 2014 to 18,988 tonnes in 2015) (4).
Traders have noted how ‘onion farming is expanding worldwide’, including in countries like Senegal (the leading extra-EU market for Dutch onion exports) ‘aiming to have their own crops available on a weekly basis’ (3). This expansion in Senegalese onion production includes investments by Dutch traders such as J.P. Beemsterboer Food Traders (see companion article, ‘Gambia Withdraws Import Ban on Onions and Potatoes’, 22 May 2017).
Dutch Onion exports to West African markets (0703)
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | % Change 2015-16 | |
| Senegal | 145,191 | 132,974 | 160,919 | 146,161 | 153,458 | 173,154 | +12.8% |
| Ivory Coast | 66,188 | 62,463 | 77,503 | 66,845 | 94,320 | 69,412 | -26.4% |
| Guinea | 36,505 | 50,499 | 46,099 | 46,849 | 52,860 | 55,419 | +4.8% |
| Mauritania | 35,636 | 45,192 | 40,764 | 42,601 | 44,994 | 51,052 | +13.5% |
| Sierra Leone | 10,582 | 14,252 | 17,081 | 18,473 | 19,694 | 18,064 | -8.3% |
| Mali | 3,969 | 4,854 | 8,772 | 13,032 | 16,746 | 14,266 | -14.8% |
| Gambia | 12,073 | 12,649 | 10,970 | 14,737 | 14,530 | 14,934 | +2.8% |
| Liberia | 5,857 | 7,585 | 6,794 | 7,554 | 9,068 | 9,397 | +3.6% |
| Guinea Bissau | 3,093 | 3,573 | 4,087 | 4,131 | 4,610 | 5,537 | +20.1% |
| Burkina Faso | 472 | 1,272 | 2,336 | 1,771 | 3,445 | 3,107 | -9.8% |
| Cape Verde | 1,489 | 1,154 | 1,321 | 1,353 | 1,656 | 1,304 | -21.3% |
| Ghana | 939 | 1,511 | 2,388 | 1,712 | 1,758 | 1,283 | -27% |
| Benin | 78 | – | – | 127 | 178 | 374 | +110.1% |
| Sao Tome é Principe | 336 | 310 | 235 | 259 | 244 | 256 | +4.9% |
| Togo | 390 | 276 | 306 | 236 | 384 | 231 | -39.8% |
| Nigeria | – | – | 28 | 31 | 58 | – | – |
| Sub-Total | 322,798 | 338,564 | 379,558 | 365,872 | 418,003 | 417,790 | -0.05% |
| West Africa % total | 50.8% | 47.1% | 54.4% | 51.3% | 49.3% | 51.6% | |
| Total Dutch exports | 635,554 | 718,129 | 697,606 | 712,054 | 848,697 | 809,355 | -4.6% |
Source: EC market access data base http://madb.europa.eu/madb/indexPubli.htm
| Comment and Analysis Moves to restrict imports with a view to stimulating domestic onion production are likely to prove unsustainable in the medium term, without complementary measurers to strengthen the functioning of local onion supply chains. Promoting dialogue between producers and traders to encourage greater local sourcing, particularly when linked to transparent systems for allocating import licenses in line with the attainment of realistic local procurement targets, have in some African countries transformed the local onion supply situation.The classic example in this regard is Namibia, where within the framework of a broader Horticulture Development Initiative (HDI) with a strong local Market Share Promotion scheme, the 2011 Special Potato and Onion Scheme has seen local sourcing increase to account for 39% of local consumption within 5 years (5) (for more details see the Comment and Analysis section of the companion article ‘The Belize potato market crisis: Sharing policy experience on sustaining local production in small ACP economies’, 3 April 2017 and ‘Namibia’s Retail Sector Charter and the Strengthening of Local Supply Chains’, 24 March 2017).Of course Namibia has the benefit of a well-developed transport and communication infrastructure, with relatively large, well-financed farmers, being the principal beneficiaries of these arrangements. It also has a well-established, transparently managed mechanism for regulating imports under its’ so called ‘controlled products’ regulation (6). The situation in Mauritania is somewhat different and hence this type of scheme cannot be automatically transplanted. However it does indicate what can be achieved when trade policy measures are used as part of an integrated policy for the promotion of local horticulture. Closer to home, Senegal’s use of seasonal import restrictions has even seen major Dutch onion trading companies investing locally (see companion article, ‘Gambia Withdraws Import Ban on Onions and Potatoes’, 22 May 2017) and even arguing against excessive levels of imports of Dutch onions. |
Source:
(1) Freshplza.com, ‘Onion trade is a charity at the moment’,
http://www.freshplaza.com/article/168335/Onion-trade-is-a-charity-at-the-moment
(2) Freshplaza.com, ‘Mauritania dumping market for onions’, 4 April 2017
http://www.freshplaza.com/article/173354/Mauritania-dumping-market-for-onions
(3) Freshplaza.com, ‘Dutch trade in onions bad at the moment’, 12 May 2017
http://www.freshplaza.com/article/175330/Dutch-trade-in-onions-bad-at-the-moment
(4) EC, Market Access Data Base
http://madb.europa.eu/madb/statistical_form.htm
(5) Namibian Agronomic Board, ‘Horticulture’
http://www.nab.com.na/controlled-crops/horticulture/
(6) Namibian Agronomic Board, ‘Controlled Products’
http://www.nab.com.na/controlled-crops/
| Key words: Mauritania, Onions, Senegal, J.P Beemsterboer Food Traders, Namibia Tags: Horticulture, West Africa EPA |