Increased Control on Turkish Onions Discourages Exports

Published 2020년 1월 15일

Due to onion shortages and the subsequent price spike in 2019, Turkey has increased regulations on its exports. The production outlook for the first half of 2020 is more optimistic.

A new regulation has been implemented in Turkey on onion and potato exports. According to the Turkish Ministry of Trade, onion and potato suppliers in Turkey will now need special permission to export their goods. The regulation is a preventive measure for 2020 due to extreme shortages of onion supplies in 2019, due to which the Ministry had to allow the import of onions to overcome the supply and demand gap. The shortage was caused mostly by an increase in exports combined with undetailed agricultural planning and shrinking cultivation as well as inadequate climate conditions.

Turkey’s onion export for 2019 was USD 31.6M, higher than the past 5 years’ average of USD 22.3M. The increase in exports is linked to shortages in India, one of the biggest sellers of the vegetable, after it suffered from heavy rains at the end of the monsoon season which negatively affected production and caused South Asian prices to spike. During India’s onion crisis in 2019, Turkey temporarily exported 3.9K tons of onions to India which has led to a greater shortage of onions in the Turkish domestic market.

How Has the Shortage Affected Domestic Prices?

The shortage of supplies caused onion prices to skyrocket. The domestic retail price shot up from TRY 2-3 per kg (USD 0.34-0.51) to TRY 8-10 per kg (USD 1.36-1.70). This is not the first time Turkey has gone through difficulties in managing prices, as the country has struggled from high prices for staple foods, including onions, in late 2018 due to illegal stockpiling. All of this seems to have impacted the Ministry’s decision, as it disclosed these export measures are taken to avoid fluctuation in prices resulting from supply shortages caused by exports.

Impact on Onion Importers

The increase in export control is expected to impact Turkey’s biggest onion importer, Israel, as well as other large importers such as Iraq. Relatively smaller importers of Turkish onions, such as Saudi Arabia and Bulgaria, might also want to be on the lookout for changes in import quantities. Egypt, another big exporter to Middle Eastern countries, and currently to India as well, is expected to potentially benefit from the regulation. China is another emergency onion source for India and could also potentially reap the benefits.

Optimistic Harvest Estimates

Since the increased control comes as a preventive measure to avoid more shortages rather than as a retroactive solution for 2019, it is unclear exactly when it will be assuaged. The situation is looking better, however, as farmers have planted more seeds in 2020 to make up for the crisis and yield is expected to rise by 10 -15% compared to 2019. This is expected to impact the harvest of winter varieties that occur during late spring and early summer.