Summary
West Africa markets for Dutch onion exports have become increasingly important, with the Africa markets overall being seen as having the greatest future growth potential. With some African government using quantitative restriction on onion imports to try and boost domestic production in response to growing demand, the question arises: will the EC seek to use trade agreement commitments to put an end to the application of all forms of quantitative restrictions on imports from the EU? Pressure to do so could increase should a ‘hard Brexit’ occur, which disrupts Dutch onion exports to the UK market. The experience of the August 2014 Russian import embargo suggests any loss of markets for Dutch onion exporters leads to expanded efforts to increase exports to African markets, particularly in West Africa.
The Netherlands onion export trade has become more dependent on West African export markets in recent years, particularly following the August 2014 Russian agri-food product import embargo. Dutch onion exports to Russia fell from 100,573 tonnes in 2014 to 16,604 tonnes in 2018. This 84% decline in exports to Russia saw the Russian market account for only 2.1% of Dutch onion exports in 2018 compared to 9.1% in 2014 (and fully 37.3% in 2003) (1).
Dutch onion exports to Russia (070310) (tonnes)
| 2003 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |
| Total Dutch Exports | 402,617 | 714,858 | 694,141 | 708,470 | 844,473 | 803,014 | 919,107 | 777,478 |
| Russia | 150,359 | 50,692 | 63,366 | 100,573 | 18,754 | 17,050 | 15,755 | 16,604 |
| Russia % total | 37.3% | 7.1% | 9.1% | 14.2% | 2.2% | 2.1% | 1.7% | 2.1% |
Source: EC Market Access Data Base
In contrast Dutch onion exports to West Africa markets between 2014 and 2018 increase 91,209 tonnes (+25.5%) cancelling out the adverse impact of the loss of the Russian market over the same period. This has seen an increase in the importance of West African markets to Dutch onion exporters from to 50.6% in 2014 to 57.8% in 2018. While this expansion in Dutch onion exports to West African markets was underway prior to the closure of the Russian market, with West Africa markets accounting for only 34.8% of total extra-EU Dutch onion exports in 2003, the Russian import embargo accelerated the expansion of Dutch onion exports to West Africa.
Dutch onion exports to West Africa (070310) (tonnes)
| 2003 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Change 12-18 | |
| Total | 402,617 | 714,858 | 694,141 | 708,470 | 844,473 | 803,014 | 919,107 | 777,478 | +8.8% |
| Senegal | 59,410 | 132,974 | 160,915 | 146,161 | 153,458 | 171,614 | 200,462 | 147,931 | +11.2% |
| Cote d’Ivoire | 36,247 | 62,463 | 77,503 | 66,845 | 94,320 | 69,412 | 108,519 | 99,147 | +56.7% |
| Guinea | 15,025 | 50,499 | 46,099 | 46,849 | 52,860 | 55,281 | 72,690 | 69,760 | +38.1% |
| Mauritania | 13,802 | 45,192 | 40,764 | 42,601 | 44,994 | 50,902 | 63,103 | 56,894 | +25.9% |
| Mali | 147 | 4,854 | 8,772 | 13,032 | 16,744 | 14,266 | 29,473 | 15,298 | +215.2% |
| Gambia | 7,866 | 12,649 | 10,970 | 14,737 | 14,530 | 14,934 | 21,398 | 25,704 | +103.2% |
| Sierra Leone | 4,030 | 4,252 | 17,081 | 18,473 | 19,694 | 18,064 | 20,940 | 20,870 | +390.8% |
| Guinea Biss | 1,340 | 3,573 | 4,087 | 4,131 | 4,610 | 5,537 | 5,413 | 7,735 | +116.5% |
| Ghana | 180 | 1,511 | 2,388 | 1,712 | 1,758 | 1,277 | 1,568 | 1,427 | -5.5% |
| Cape Verde | 1,699 | 1,154 | 1,321 | 1,353 | 1,656 | 1,304 | 2,205 | 2,297 | +99.0% |
| Burkina Faso | 28 | 1,272 | 2,336 | 1,771 | 3,445 | 3,107 | 3,787 | 1,620 | +27.4% |
| Benin | 0 | 127 | 178 | 346 | 180 | 203 | – | ||
| Togo | 116 | 76 | 306 | 236 | 384 | 231 | 472 | 101 | +32.9% |
| Sao Tome | 266 | 10 | 235 | 259 | 244 | 256 | 336 | 505 | +4,950% |
| West Africa – sub total | 140,156 | 322,479 | 372,777 | 358,287 | 408,875 | 406,531 | 530,546 | 449,496 | +39.4% |
| 34.8% | 45.1% | 53.7% | 50.6% | 48.4% | 50.6% | 57.7% | 57.8% |
Source: EC Market Access Data Base
Since the Russian import embargo Dutch onion exporters have faced a ‘significant difference between the first and second half of the season in the last five to six years.’ While West Africa was one of the most important markets for exports in the first half of the season (July to December) ‘up to 2014, large volumes of Dutch onions went to Russia in the second half of the season’ (3). The loss of the Russian market has created difficulties for the Dutch onion export sector which has been facing much lower prices in the second half of the season.
Senegal has become by far most important West Africa market for Dutch onion exports (taking at its peak in 20117 some 21.8% of total Dutch onion exports. However, this trade is highly seasonal, with the Government of Senegal restricting imports of onions on a seasonal basis at the beginning of each year (2). This is having an impact on the geographical distribution of Dutch onion exports to West Africa, with Senegal’s share of Dutch onion exports to West Africa falling to 32.9% in 2018 compared to an average 40% share for the preceding 6 years. More recently in the 2018/19 season, Dutch exporters reported onion exports to Guinea and Ivory Coast increased compared to the 2017/18 season, while exports to Senegal, Mali and Mauritania were lagging slightly (4).
Nevertheless, considering West Africa as whole, the region is ‘becoming an increasingly important export market’, taking ‘more and more onions every year’. This needs to be seen in a context where ‘the Netherlands is the largest onion exporter in the world with a 20% share of the total global trade’. It has been highlighted how the largest opportunities for Dutch onion exporters ‘lies with the growth of the world’s population’, with half of the projected expansion in the global population over the next 20 to 30 years being found in Africa (5). The importance of African markets to the Dutch onion export trade is therefore only likely to increase in the coming years.
This is particularly the case when one considers the broadening out of the trend in the expansion of Dutch onion exports beyond West Africa. Since 2012 Dutch onion exports to 5 Central African countries have increased 47.9%, with export volumes to these five Central African countries having increased 548% since 2003.
Dutch onion exports to Central Africa (070310) (tonnes)
| Central Africa | 2003 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | Change 12-18 |
| Total Dutch Exports | 402,617 | 714,858 | 694,141 | 708,470 | 844,473 | 803,014 | 919,107 | 777,478 | +8.8% |
| DRC | 377 | 7,597 | 7,926 | 9,754 | 12,256, | 7,926 | 13,002 | 14,795 | +94.7% |
| Congo | 3,346 | 9,901 | 8,961 | 9,264 | 11,017 | 11,951 | 12,225 | 13,635 | +307.5% |
| Cameroon | 576 | 5,128 | 4,778 | 5,438 | 2,904 | 2,678 | 2,030 | 3,394 | +489.2% |
| Gabon | 2,018 | 4,959 | 4,980 | 5,123 | 5,805 | 6,462 | 6,224 | 7,678 | 280.5% |
| Angola | 87 | 472 | 887 | 1,410 | 2,428 | 888 | 1,854 | 1,994 | 1,192% |
| Central Africa Sub-Total | 6,404 | 28,057 | 27,532 | 30,989 | 34,410 | 26,905 | 24,335 | 41,496 | +47.9% |
| % Share Dutch extra-EU | 1.6% | 3.9% | 4.0% | 4.4% | 4.1% | 3.4% | 2.6% | 5.3% |
Source: EC Market Access Data Base
Dutch exporters are sceptical over the ability of African producers to meet increasing African demand for onions. This scepticism is nominally based on climate considerations, with it being argued conditions for onion production are far more favourable in Western Europe than in Africa. Against this background it has been highlighted how considerable importance is being attached to strengthening Dutch onion distribution networks in Africa, particularly in those regions where the greatest market growth potential is seen to exist (4). This needs to be seen in a context where for onions Africa has the ‘highest consumption per capita in the world’, with Senegal consuming 21.7 kgs of onions per capita per year (6).
| Comment and Analysis With African onion consumption growing there are a multiplicity of efforts underway to boost onion production in West Africa. In Ghana, with the demand for onions ‘growing at an estimated 11% per annum’, onion production is seen as delivering ‘good value to local farmers’ (6). This is seeing a host of support programmes being launched to boost onion production (7). However, with demand growing rapidly local production is seen as ‘relatively very low’ (6).In countries such as Senegal non-tariff trade policy tools are actively being used to create market space for expanding local production, particularly through the use of seasonal import restrictions (a tool also use effectively in Namibia (8), alongside a system for the preferential allocation of import licences to traders who meet local sourcing targets for onions).While in Senegal some Dutch traders have responded to these seasonal restrictions by investing in local production (see companion epamonitoring.com article ‘Senegal remains major market for Dutch onion exports despite growth in domestic production’, 28 January 2017), others are focussing on the threat to Dutch onion exports from those trade barriers aimed at supporting local production (4).It remains to be seen whether, the EC’s growing policy focus on the enforcement of trade agreement commitments (see companion epamonitoring.net article ‘Is the EC Preparing for Greater Enforcement of ACP Trade Agreement Commitments?’, 10 March 2020), will manifest itself in efforts to halt the use of all forms of quantitative restrictions on imports of EU onions to African countries where the such trade policy tools are currently in use.The situation is complicated in West Africa, given the interim-EPA concluded with West Africa (which includes commitments on the prohibition of quantitative restrictions on imports from the EU), has not yet been signed and ratified at the regional level. In this context such provisions prohibiting the use of quantitative restrictions on imports from the EU cannot yet be invoked in the case of Senegal.However, both Ghana and Cote d’Ivoire are in the process of implementing bilaterally signed and ratified interim EPAs, with this potentially allowing the EU to invoke provisions prohibiting the use of quantitative restrictions on imports of onions from the EU from the date of entry in to force of the agreement. This would then prevent the governments of Ghana and Cote d’Ivoire from using seasonal restrictions and other similar non-tariff trade policy tools, in support of current efforts to boost local self-sufficiency in onion production. This needs to be seen in a context where it is cheaper to transport onions from Rotterdam to Dakar than it is to ship onions by road to markets in, for instance, Paris (6).The pressure to remove quantitative restrictions on exports of EU onions to African markets such as those used in Senegal, is likely to increase if a no-deal Brexit or ‘hard Brexit’ occurs at the end of 2020. This needs to be seen in light of the recent positions adopted by the UK government in regard to the border controls which will be applied to imports from EU27 member states, once the UK leaves the EU customs union and single market on 1st January 2021. This is likely to initially disrupt existing supply chains between the Netherlands and the UK and subsequently increase the costs of doing business along these supply chains. This needs to be seen in a context where the Netherlands accounts for 33% of UK imports (9) and takes 12% of Dutch onion exports of onions and shallots (10). |
Sources
(1) EC Market Access Data Base
https://madb.europa.eu/madb/statistical_form.htm
(2) Freshplaza.com, ‘Onion exports increasingly depends on the first half of the season’, 10 March 2020
https://www.freshplaza.com/article/9197079/onion-exports-increasingly-depends-on-the-first-half-of-the-season/
(3) Freshplaza.com, ‘Onion prices at the farm gate higher than last year around the same period’, 12 March 2020
https://www.freshplaza.com/article/9198588/onion-prices-at-the-farm-gate-higher-than-last-year-around-the-same-period/
(4) Freshplaza.com, ‘Could Dutch onions reach a new export record?’, 18 February 2020
https://www.freshplaza.com/article/9189938/could-dutch-onions-reach-a-new-export-record/
(5) Freshplaza.com, ‘Onion trade remains a game’, 10 March 2020
https://www.freshplaza.com/article/9198566/onion-trade-remains-a-game/
(6) waystocap.com, ‘Onions Importing Process to Africa’, Fatine Laaroussi Tribek, blog posting
https://www.waystocap.com/blog/onions-importing-process-to-africa/
(7) ghana-mdae.org, ‘Onion Farmers Increase Yields with Good Seed and Adoption of Good Practices’
https://ghana-made.org/news/onion-farmers-increase-yields-with-good-seed-and-adoption-of-good-practices/
(8) Namibian Agronomic Board, ‘Horticulture Objective’
https://www.nab.com.na/horticulture/
(9) OEC, ‘Where does the United Kingdom import Onions and shallots, fresh or chilled from? (2017)’
https://oec.world/en/visualize/tree_map/hs92/import/gbr/show/070310/2017/
(10) OEC, ‘Where does the Netherlands export Onions and shallots, fresh or chilled to? (2017)’
https://oec.world/en/visualize/tree_map/hs92/export/nld/show/070310/2017/