NZ onion growers look to better season after export slide last year

The last onion season was affected by a cool spring, which lowered yields, an elevated local currency and increased rivalry from northern hemisphere, Photo / Brett Phibbs

New Zealand onion growers are optimistic about a better season for the country's largest fresh vegetable export after suffering a 16 per cent decline in the past year as poor weather affected yields and returns were hit by a higher currency and increased competition from northern hemisphere rivals.

Exports of onions fell to $81.4 million in the year through June, from $97.1 million a year earlier, according to Statistics New Zealand data.

Export volumes declined 3.5 per cent to 174,000 tonnes, according to the data.

The last onion season was affected by a cool spring, which lowered yields, an elevated local currency, increased rivalry from northern hemisphere growers and import bans in Russia which led to more European onions flowing into other markets.

Still, industry organisation Onions New Zealand is hopeful this year will prove better, with a lower currency and a good start so far to the growing season.

"Everybody had a really weird spring last year. The plants struggled," said Onions New Zealand chairman Michael Ahern.

About 60 per cent of New Zealand's onion seed crop has been planted to date this season and the organisation is happy with the planting phase, with a benign winter so far, he said.

"We are hopeful at this point," he said.

It was still a couple of months too early to tell how the northern hemisphere season was tracking with harvesting only just starting on very early crops, which so far seemed to be about average, he said.

A good season in the northern hemisphere tended to cause more of an overlap in sales at the tail end of their season, which crimped margins for New Zealand's new crop.

Ahern is hopeful a decline in the kiwi dollar will keep the exchange rate around current levels for the bulk of the selling period for New Zealand onions spanning January through May.

The onion industry has become more efficient to cope with a higher currency, rationalising, mechanising and diversifying into other crops such as potatoes, grain, apples and the dairy industry, he said.

That meant any currency benefit would likely go straight to bottom line profit, he said.

"We have been long-suffering and we have been in a kind of a holding pattern," he said.

"We have become painfully acclimatised to that previous environment so that when you do get a bit of a break it looks all the sweeter."

Shipping rates were also at more reasonable levels following declines last year, he said.

Germany is the largest export market for New Zealand onions, followed by Indonesia and Japan.

Unlike many other commodity exports, China doesn't feature in the export data for onions because New Zealand doesn't yet have phytosanitary certification.