1. Weekly News

India

Indian Government Purchases Onions at Higher Prices to Stabilize Market

The Indian Government purchased approximately 0.45 million metric tons (mmt) of onions for the 2024 financial year (FY) at prices exceeding market rates. The National Consumers Co-operative Federation of India (NCCF) procured onions at an average price of USD 0.30 per kilogram (kg), a significant increase from USD 0.20/kg in the previous FY. Authorities are considering strategies for the optimal use of the onion buffer, potentially including temporary releases to stabilize market prices. The government procured 0.64 mmt of onions in 2023, sold at a subsidized rate of USD 0.30/kg to help stabilize retail prices without affecting farmers' profits. In Jul-24, onion retail prices hovered around USD 0.48/kg but are expected to decrease soon. Retail inflation for onions has doubled since Jul-23, with a year-on-year (YoY) increase of 36.71% in Jul-24.

Netherlands

Promising 2024 Season for Dutch Onions Amidst Global Weather Challenges

The Dutch onion season began in the last week of Jul-24 with the early harvest of yellow onions, while red onions are still being collected. This season looks promising due to extreme weather conditions in competitor countries like Spain, Egypt, and Turkey, which are experiencing drought and heatwaves. Additionally, increased demand from East Asia, where the monsoon season has disrupted supply, is favorable. However, Dutch production faced challenges from heavy rainfall, which reduced the planting period and limited the use of allocated cultivation areas. Despite these issues, the harvest is progressing at an average rate. Onions will be stored to develop more outer layers, with overseas exports expected to begin in the second half of Aug-24.

Turkey

Amasya Onion Producers Face Challenges Amid Increased Cultivation and Low Prices

Onion cultivation in Amasya, Turkey, increased from 74 thousand acres in 2023 to 79 thousand acres in 2024, with an expected yield of approximately 430 thousand metric tons (mt). Despite Amasya being the second-highest onion-producing city in Turkey, with onions priced at USD 0.18/kg in the field, producers are struggling due to the low prices and rising costs. The Amasya Chamber of Agriculture president highlighted the price fluctuation, noting that onions were USD 0.36/kg 15 days ago. Producers urged the Ministry of Commerce to intervene, emphasizing that the issue lies in sales rather than production as Amasya meets 13% of Turkey's onion needs. Moreover, sales to key market Antalya have dropped by one-third this year, and Antalya plan to store over 10 thousand mt of their 30 thousand mt yield for winter needs, as onions cannot be stored outside in open areas.

Ukraine

Onion Prices in Ukraine Rose 15% WoW in W31

For the first time since early Jul-24, onion prices in Ukrainian farms have risen by an average of 15% week-on-week (WoW) in W31. Producers are now shipping onions at USD 0.24 to 0.39/kg. This price hike is due to the off-season period, with many farmers having already sold their available onion stocks and only a few beginning to harvest later varieties.

Despite the recent price rise, current onion prices are still 26% YoY lower than at the end of Jul-23. Farmers anticipate that prices will decrease again once the supply from local farms increases

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters(W31 2023 to W31 2024)

India

In W31, onion prices in India remained unchanged WoW. This price stability follows the government's procurement of nearly 71 thousand mt of onions as of Jul-24 for buffer stock, out of a target of 500 thousand mt for price stabilization. The government expects retail prices to ease with the progress of the monsoon over most parts of the country. This move comes as prices of vegetables, including onions, surged 88.24% YoY due to adverse weather conditions. In Karnataka, the top Kharif onion-producing state, 30% of the targeted 150 thousand hectares (ha) has been sown, with good progress in other primary states. Despite marginally lower Rabi production in 2024/25, the domestic onion market remains stable due to higher releases from the rabi harvest.

Mexico

In W31, Mexican wholesale onion prices fell 7.89% WoW and 45.31% YoY to USD 0.70/kg, reversing previous increases. This drop occurred despite severe weather disruptions, including Hurricane Hilary in late Aug-23, which destroyed a significant portion of the early Mexican onion crop. Initially, this led to higher prices due to the reduced local supply and increased import dependency. However, prices started to decrease as the market adjusted and imported onions began to fill the supply gap. The high production costs and tight supply situation caused by the weather initially pushed prices up. Still, the influx of imported onions helped stabilize prices as supply conditions improved.

Egypt

In W31, Egypt's wholesale onion prices decreased by 7.14% WoW and 72.92% YoY to US0.13/kg. This significant price drop is due to a sharp devaluation of the Egyptian pound due to foreign exchange imbalances, increasing the importance of onion exports for hard currency revenues. Moreover, a substantial increase in onion production in Egypt was forecasted in 2024, which could lead to further price reductions. Consequently, a surplus of cheap onions from Egypt is expected to flood the European market soon.

Spain

In W31, Spain's wholesale onion prices dropped significantly, decreasing by 3.33% WoW and a substantial 42% YoY to USD 0.29/kg. This decline is due to the influx of onions imported from third countries, primarily China, which has exerted downward pressure on the market despite an excellent domestic production year. Representatives from the Agrarian Association of Young Farmers (ASAJA) in Bolaños de Campos highlighted that this downward trend began several months ago, correlating with the start of these imports. The situation has further deteriorated in recent weeks, aggravated by rising production costs. Additionally, the sector is grappling with a critical issue: a lack of qualified labor to harvest the crop, further complicating the already challenging market conditions.

3. Actionable Recommendations

Address Production Challenges and Support for Dutch Onion Farmers

Dutch onion farmers should receive comprehensive support to overcome production challenges, particularly those caused by heavy rainfall. Producers can access financial assistance through various channels to mitigate these issues and capitalize on favorable market conditions, including bank loans, private investment, and agricultural grants. Investing in weather-resistant cultivation technologies and improved storage facilities will help secure better yields and reduce post-harvest losses. These measures will enable Dutch onion farmers to maximize their harvest potential and strengthen their competitive position in the global market, especially with rising East Asian demand.

Diversify Market Channels and Enhance Storage Capabilities for Ukrainian Onion Producers

Ukrainian onion producers should diversify their market channels and improve storage capabilities to manage price volatility and sustain profitability. By expanding into new export markets and establishing direct partnerships with buyers, producers can reduce reliance on local demand and better navigate price fluctuations. Additionally, investing in advanced storage technologies will allow farmers to extend the shelf life of their onions, enabling them to sell during off-peak seasons when prices are higher. These strategies will help Ukrainian farmers stabilize their income and enhance their resilience against market changes.

Leverage Export Opportunities and Address Currency Fluctuations in Egypt

Egypt should enhance export opportunities to capitalize on its increased onion production and address currency-related price drops. Developing strategic partnerships with international buyers and exploring new markets can help absorb the anticipated surplus of onions. This approach will help maintain competitive pricing and improve revenue generation from onion exports. These recommendations aim to address the current challenges and opportunities in the global onion market, ensuring stability and growth for producers and consumers alike.

Sources: Epravda, Eastfruit, Kamu3, AgroPortal.ua, Livemint, Indian Express