Record High Onion Prices in Europe Amid Unprecedented Shortage

Published 2023년 2월 24일

Onion prices in Europe have skyrocketed in several markets, and, in some cases, prices have reached a record-high value. In the Netherlands, Europe’s leading onion supplier, the wholesale price for onions reached a record high value of 0.65/kg in February 2022. Western and Central Europe and the Central Asian regions are experiencing a severe shortage in their onion supply, raising prices to historic levels. The Russian invasion of Ukraine, abnormal frosts in the Central Asian area that had led to lower stocks, and several imposed export bans to protect local markets have all supported an unprecedented onion shortage in the European supply.

Onion prices In Europe have skyrocketed after a severe supply shortage due to reduced production and low stocks. The wholesale price for onions reached a historic high of USD 0.65/kg in the Netherlands, the leading European onion supplier. Wholesale prices for onions in Georgia also reached a record high, and imports are reported to be abnormally high. In Ukraine, Poland, and Moldova, substantial-high onion prices have been recorded throughout the first weeks of 2023.

According to Tridge Price Index, in Feb-22, the wholesale onion price in the Netherlands reached a historic high at USD 0.65/kg. The increase represents a substantial 33% MoM increase and an impressive 350% up from last year’s February average price of USD 0.14/kg. Reduced yields in most of the onion-producing countries in Europe have generated a greater demand for the few good quality Dutch onions, resulting in a severely limited supply in the Dutch market.

The ongoing Russian-Ukraine conflict has also had some effects on the onion market: onion production in the southern areas of Ukraine decreased sharply after the occupation of Kherson Oblast by the Russian army. Unexpectedly, Ukraine had become a major importer of onions from Poland, Romania, Moldova, Azerbaijan, Kazakhstan, and Turkey when it used to be a net onion exporter. In addition, Central Asian onion markets have suffered their own onion shortage supply, which has contributed to an unprecedented onion shortage.

Abnormal frosts that swept through Russia, Kazakhstan, Uzbekistan, and Kyrgyzstan destroyed vast stocks of onions stored in uninsulated warehouses in the region. The decreased production and low stocks have severely hampered the onion supply in the Central Asian region. Furthermore, on June-22, severe floods in Pakistan destroyed a large part of the onion crop production. As a result, Pakistan, which is one of the world’s largest exporters of onions, has become an importer of Iranian, Uzbekistan, and Turkish onions.

The general shortage in the region has caused several onion export bans already introduced in Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, and Azerbaijan to curb domestic prices. A similar export ban was introduced in Turkey in November 2022 when the Turkish government banned the export of potatoes and onions due to increased prices to stabilize local supply in the domestic market. To this day, the export ban hasn’t prevented wholesale onion prices in Turkey from rising. From the Tridge Price Index, on week 7 of the year, Turkish red onions soared 27% WoW, reaching a very high price of USD 1.19/kg. The government of Iran also has recently announced the introduction of an export duty on onions and is also considering export restrictions.

Another significant factor that has supported this year’s increase in prices in the region is the rise in the cost of production of onions in both Western and Central Europe. Energy costs, particularly for the winter onion crops, have substantially risen in the main producing regions. According to the Russian Ministry of Agriculture, from February 2022 to February 2023, the cost of onions in the farmgate sector increased by 28.7% YoY.

Poor production, tight supplies, and export bans in top producer countries are causing availability issues and driving the price up. Onion prices in Eastern Europe and Central Asia are expected to rise and reach the USD 1/kg wholesale trademark. Retail prices can potentially reach an unprecedented range of USD 1.5 to 2/kg. Global onion prices, in general, are expected to maintain a moderate upward trend through 2023, driven by a global decrease in production. However, in European markets, prices are expected to keep increasing, reaching record highs as already seen in the Netherlands.