W46 Onion Update: Supply Declines in North America, Varied Performances in Export Markets, and Price Controls in India
North America's Abundant Supply, Challenges in Canada and Mexico, and Anticipated Market Dynamics in 2024
In W46 in the onion landscape, North America has a high onion supply in Nov-23. However, experts anticipate that supply changes may approach in 2024. Meanwhile, in Canada, a tight onion supply is expected in the 2023/24 season due to substantial rainfall during the harvest season, leading to some products being left unharvested. As a result, Canada may need to source onions on the international market earlier than usual, possibly as early as Jan-24 or Feb-24. Mexico is grappling with water shortages in 2023, affecting the seeding process, which is expected to be carried out on a smaller scale in early spring. The Netherlands is also experiencing a limited onion harvest. With the restricted harvest, the Netherlands may import onions from the United States (US).
The US onion market is anticipated to be strong during late winter and spring 2024. Yellow onion prices in the northwest are expected to be at or below production costs. Meanwhile, the Treasure Valley in Eastern Idaho/Oregon faced challenges with heavy rain in Aug-23, impacting the storage supply of onions. Demand for yellow onions is projected to increase to USD 10 per kilogram (kg) around Christmas, while the red onion market is expected to remain stable. Known for being more significant than the Thanksgiving period, the Christmas rush contributes to the market's increased attractiveness.
Peruvian Onion Exports Surge in Jan-23 to Sep-23
Peruvian fresh onion exports from Jan-23 to Sep-23 reached 151.5 thousand tons, worth USD 59 million. The US and Colombia, major importers of Peruvian onions, have seen a reduction in both import volume and value. Spain increased the import volume of Peruvian onions by 80% year-over-year (YoY) and value by 125% YoY, while Chile saw a 6% YoY increase but a 6% YoY decrease in value. Haiti experienced significant growth, with a 57% YoY increase in both volume and value, accumulating 1.1 thousand tons for USD 500 thousand.
India Imposes Minimum Onion Export Price and Increased Buffer Stock Amid Fluctuating Local Prices
The Indian government imposed a minimum onion export price of USD 800 per metric ton (mt) till December 31, 2023 to control prices and increase local onion supply. The average onion price in India stood at USD 0.71/kg (INR 59.09/kg) on November 13, with the highest recorded price at USD 1.08 (INR 90/kg) and the lowest at USD 0.24/kg (INR 20/kg). Onion prices in Delhi, in particular, fell to USD 0.72/kg (INR 60/kg) on November 13, after climbing from USD 0.48/kg (INR 40/kg) on October 25 to USD 0.96/kg (INR 80/kg) on October 29. Considering the decreasing quantity of stored Rabi 2023 onions, the government has also announced the procurement of an extra 200 thousand mt of onions for the buffer, aiming to ensure an adequate supply of onions to local consumers at reasonable prices.
Bangladesh Implements Subsidized Prices for Essential Goods Including Onion From November 14, 2023
Starting November 14, the government in Dhaka, Bangladesh, will offer subsidized prices for essential commodities in city corporations. The state-run Trading Corporation of Bangladesh (TCB) has set the onions prices at USD 0.45 (BDT 50/kg), with each customer able to purchase 2 kg of each item daily.
Uzbekistan Witnesses 18% Drop in Onion Prices Amid Increased Local Supply and Low Export Demand
Uzbekistan's onion wholesale prices have dropped by 18% in the past three weeks, mainly due to increased domestic supply and weak demand in foreign markets. The average price decreased from USD 0.18 to USD 0.15/kg (UZS 2,200 to UZS 1,800/kg), 1.7 times lower than in 2022 and nearly equivalent to the same period in 2021. The high onion prices in Oct-23 and November 2022 were due to active demand in foreign markets. Traders believe a surplus of onions in the domestic market is due to the high onion harvest.