1. Weekly News

India

India's Onion Exports Reach 26 Thousand MT as Export Restrictions Lifted

As of Jul-24, India has exported 26 thousand metric tons (mt) of onions in the current financial year 2024/25. The government lifted the onion export prohibition on May 4, 2024, allowing exports with a minimum export price (MEP) of USD 550/mt and an export duty of 40%. Additionally, the government has procured 468 thousand mt of onions, mainly from Maharashtra, for price stabilization through the National Cooperative Consumers' Federation (NCCF) and the National Agricultural Cooperative Marketing Federation (NAFED). This buffer stock aims to stabilize prices during lean supply periods. Compared to the previous year, onion farmers have seen higher price realizations.

Netherlands

Dutch Onion Exports to West Africa Surge in W29

In W29, Dutch onion exports to West Africa notably increased. The Ivory Coast emerged as the largest buyer, importing 2,613 mt, marking a 50% rise year-on-year (YoY). This surge is attributed to lower onion prices this year compared to the higher costs experienced last year. In the first three weeks of the new sales season, nearly 5,200 mt have been shipped to the Ivory Coast. Guinea was the second largest buyer in W29 with 2,122 mt, though its sales lagged behind last year by less than 8%. The United Kingdom (UK) remains a stable but reduced buyer, importing 5,150 mt up to W29, a 41% YoY decrease. Total exports for W29 reached 13,364 mt, with cumulative exports for the first three weeks totaling 29,134 mt.

Turkey

Ankara’s Polatlı Region Faces 70% Drop in Onion Yields Due to Extreme Heat

In Ankara's Polatlı region, a significant onion production center in Turkey, the onion harvest faces severe challenges due to above-normal temperatures. The district, which accounts for 36% of Turkey's onion needs and is known for its onion fields and warehouses, is expected to see a 70% YoY decrease in yield compared to last year. High temperatures have led to onions burning in the fields and remaining unharvested. The extreme heat has caused diseases and reduced onion sizes from the expected 500 grams (g) to just 100 to 200 g, significantly impacting farmers' costs and causing substantial losses. Currently, onion prices are USD 0.18/kg in the field and USD 0.36/kg in the market.

Ukraine

Onion Farming Expansion in Ukraine Faces Storage Challenges

Ukrainian farmers expanded onion cultivation beyond traditional regions like Kherson to Vinnytsia, Chernivtsi, Ternopil, and Lviv. Despite the increased production, onions may become costly by spring due to high electricity costs and limited access to quality storage. Only 30% of onion growers have professional storage facilities, while the remaining 70% use less efficient equipment, impacting storage duration and market prices. Farmers face a dilemma between selling onions at lower prices in November or waiting for higher prices in June, which involves balancing energy efficiency and storage quality.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W32 2023 to W32 2024)

India

In W32, onion prices in India remained steady week-on-week (WoW) at USD 0.32 per kilogram (kg). This price stability follows the government's procurement of nearly 71 thousand mt of onions as of Jul-24 for buffer stock, aiming to stabilize prices. The government anticipates a reduction in retail prices with the advancement of the monsoon across the country. This intervention comes amidst a significant 88.24% YoY increase in vegetable prices, including onions, due to adverse weather. In Karnataka, the leading Kharif onion-producing state, 30% of the targeted 150 thousand hectares (ha) have been sown, with good progress in other key states. Although Rabi production for 2024/25 is expected to be slightly lower, the domestic onion market remains stable due to increased releases from the Rabi harvest.

Mexico

Mexican wholesale onion prices dropped significantly by 14.29% WoW and 53.85% YoY to USD 0.60/kg. This decline follows severe weather disruptions, including Hurricane Hilary in late Aug-23, which devastated many early Mexican onion crops. The initial impact of reduced local supply and increased import dependency led to higher prices. However, prices began to fall as the market adjusted and imported onions started to fill the supply gap. Despite high production costs and a tight supply situation caused by the weather, the influx of imported onions helped stabilize prices as overall supply conditions improved.

Egypt

Egypt's wholesale onion prices dropped significantly by 23.08% WoW and 79.17% YoY to USD 0.10/kg. This significant decline is due to the sharp devaluation of the Egyptian pound, driven by foreign exchange imbalances, which has increased the focus on onion exports to generate hard currency revenues. Additionally, a substantial increase in onion production is forecasted for 2024, which may lead to further price reductions. As a result, a surplus of inexpensive Egyptian onions is expected to flood the European market soon.

Spain

In W32, Spain's wholesale onion prices saw a slight increase of 3.45% WoW to USD 0.29/kg from USD 0.30/kg, primarily due to the weakening Euro against the United States (US) dollar. However, YoY prices declined by 42%. This substantial decline is due to a surge in onion imports from third countries, especially China, which has put considerable downward pressure on the market, even amidst an excellent domestic production year. Representatives from the Agrarian Association of Young Farmers (ASAJA) in Bolaños de Campos noted that this downward trend began several months ago, coinciding with the start of these imports. The situation has worsened in recent weeks, compounded by rising production costs. Additionally, the sector faces a critical challenge due to a lack of qualified labor to harvest the crop, further complicating the challenging market conditions.

3. Actionable Recommendations

Leverage Price Declines in Egypt for Export Expansion

Egypt should target South Asian markets like India, Bangladesh, and Sri Lanka to capitalize on its low prices. With high onion consumption and frequent supply shortages, these regions offer a promising opportunity for Egyptian exporters. Egypt can establish a strong presence in these markets by conducting market research, forming trade agreements, investing in efficient logistics, and launching promotional campaigns. This approach will help absorb surplus production, mitigate domestic price declines, and generate valuable foreign currency revenue while providing South Asian countries with a stable supply of affordable onions.

Support for Turkish Onion Farmers

Immediate support for Turkish farmers in the Polatlı region affected by extreme heat should focus on financial aid and resources for climate-resilient farming practices. Moreover, investing in research for heat-resistant onion varieties and improving irrigation systems will also be crucial in mitigating the impact of extreme weather. Supporting Turkish farmers will stabilize local onion production, preventing significant price increases. Improved resilience to extreme weather will ensure a more consistent supply, benefiting domestic consumers and potential export markets.

Address Storage Challenges in Ukraine

Investment in modern storage infrastructure is essential to tackle storage issues Ukrainian onion farmers face. Support from agricultural organizations and private sector partnerships can help develop energy-efficient storage facilities. Providing training on best practices and upgrading existing equipment will improve storage conditions. Enhanced storage infrastructure will help Ukrainian farmers manage onion supply more effectively, reducing price volatility and ensuring a stable market supply. This will also improve onion quality for export, benefiting markets in Western Europe and other importing regions.

Sources: Tridge, Nieuwe Oogst, Theprint, AgroPortal.ua, Sondakika