W35: Onion Update

In W35 in the onion landscape, the global onion market in August witnessed notable price fluctuations. In India, red onion prices surged by 50% month-on-month (MoM), leading to a government-imposed 40% export duty for market stabilization. Due to international demand and supply shortages, Peruvian red onion prices reached a record high of USD 1.78 per kilogram (kg). Meanwhile, South African yellow onion prices, which peaked in May, have steadily decreased by 40% in the monthly average. In contrast, Indonesian onion prices have dropped due to increased imports, albeit remaining lower than the previous year's severe shortage.

As of September 1, 2023, the Delhi wholesale market had 100 old stock trucks of onions, with the National Agricultural Cooperative Marketing Federation of India (NAFED) having seven trucks and the National Cooperative Consumers Federation of India (NCCF) having 17 trucks. Nashik reported onion prices ranging from USD 0.24 to 0.35/kg, with variations based on quality and size. Madhya Pradesh priced onions from USD 0.24 to 0.33/kg, depending on quality and size. Rajasthan's prices ranged from USD 0.18 to 0.30/kg, with factors like size and quality influencing the price. The National Agricultural Cooperative Marketing Federation of India and the National Cooperative Consumers Federation of India offered onions at USD 0.25 to 0.28/kg and USD 0.25 to 0.27/kg, respectively. In Mumbai, wholesale onion prices varied, with an average market price of USD 18.74/quintal. Prices per kilogram ranged from USD 0.11 to 0.28, depending on the size and quality of the onions.

The arrival of new crops and vibrant red onions in Maharashtra might see a slight delay this year. The government's decision to impose export duties on onions aims to prevent price fluctuations that have impacted consumers in past years. Typically, India allows onion imports from October to November to stabilize prices, and these measures seek to ensure price stability and protect consumers from excessive price swings.

The Bangladesh Ministry of Agriculture has approved the import of onions totaling 21.58 thousand tons from nine countries, including China, Egypt, Pakistan, Qatar, Turkey, Myanmar, Thailand, the Netherlands, and the United Arab Emirates (UAE). This decision comes in response to India's imposition of a 40% export tax on onions, leading to a surge in onion prices in the domestic market. In W35, the price for imported onions in Bangladesh ranges from USD 0.64 to 0.68/kg (BDT 70 to 75/kg) compared to USD 0.50 to 0.55/kg (BDT 55 to 60/kg) in W34.

The onion sowing area in Flevoland, Netherlands, is set to decrease by nearly 5% in 2023, amounting to 8.52 thousand hectares (ha). Consequently, Flevoland's share in the country's total onion cultivation will fall below 30%, a notable decline from previous years when over one-third of sowing onions were grown in this province. 
The total area dedicated to seed onions in the Netherlands is forecasted to grow by 6.7% in 2023, reaching 29.26 thousand ha. While Flevoland and Zeeland have seen reductions in onion cultivation areas, other provinces like Drenthe, Groningen, North Brabant, and Limburg are witnessing significant cultivation growth. Yellow onion varieties, in particular, are driving this expansion, with the area for yellow seed onions increasing by 13.6% to 25.57 thousand ha. The area for red seed onions has decreased by a quarter to 3.69 thousand ha, mainly attributed to lower prices for red onions compared to yellow ones in recent years. Additionally, the area dedicated to second-year onion sets has decreased by 5.3% this year, totaling 5.48 ha, with Zeeland leading in this category.

The onion market faces production issues and shortages caused by unfavorable weather conditions during the summer dry onion harvest. India, a key supplier of onions to Greece, has imposed a 40% export duty to maintain lower domestic prices. These challenges include increased plant protection costs due to continuous rains, labor shortages, reduced production, and higher producer prices compared to retail prices. The cost of insurance contributions is a limitation for producers, and new sowings are expected in October.