W50 Onion Update: Onion Prices Expected to Drop in India, Onion Market Stabilize in Bangladesh, Poland Prepares to Supply Onions to EU, and Egypt Extends Onion Export Ban

Onion Prices in India Expected to Drop Following Export Ban

The Indian government expects onion prices to fall below USD 0.48 per kilogram (INR 40/kg) by Jan-24, following a ban on onion exports until Mar-24. The average price of onions in India in W50 stood at USD 0.68/kg (INR 57.02/kg), with prices in Mandis remaining around USD 0.72/kg (INR 60/kg). The export ban will not affect farmers, but traders exploiting differential prices will lose. Onion inflation in the Consumer Price Inflation (CPI) basket has doubled since Jul-23, reaching a nearly four-year high of 42.1% in Oct-23. The government has imposed a minimum export price (MEP) of USD 800 per metric ton (mt) on onion exports and a 40% export duty on onions from Aug-23 until the end of Dec-23.

Onion Market in Bangladesh Expected to Stabilize with New Harvest in Dec-23

The onion market in Bangladesh is expected to stabilize in W51, with newly harvested onions starting to enter the market. Onion hoarders will be brought under the law and action will be taken against them. The Directorate of National Consumers Right Protection said efforts are being made to determine who hoarded the onion and how it was arranged in layers in Khatunganj and Shyambazar. The government is working to stabilize the onion market and continues its campaign to protect consumer rights. The Ministry of Agriculture has announced that newly harvested Murikata and summer onions have started arriving in the market, with harvest expected at around 50 thousand tons.

The local government of Rajshahi is implementing measures to significantly increase onion yield, aiming for a production level 13 times higher than the current demand. As part of the agriculture incentive program, farmers receive support through fertilizer, high-yielding seeds, and cash. The targeted goal for the 2023/24 season is to produce 432.3 thousand mt of onions across 21.3 thousand hectares (ha) of cultivated land. In Dec-23, around 10 thousand mt of onions were harvested in the district, leading to a decline in crop prices.

Uzbekistan Witnesses Onion Export Surge in Dec-23

Uzbekistan significantly increased its onion exports in Dec-23, with logistics services market participants reporting increased requests for transport. Latvia is the leading shipment destination of Uzbek onions, followed by Poland, Russia, Belarus, and Georgia. By the end of 2023, onions will become a significant hit in Uzbekistan's fruit and vegetable exports. From Jan-23 to Nov-23, Uzbekistan exported 245 thousand tons of onions, a 33% YoY increase and a 22% growth from 2021. The number of countries importing onions has also increased by at least one and a half times.

Poland Prepares to Export Onions to EU Countries Amidst Global Market Crisis

Poland, one of the largest onion exporters in the European Union (EU), is preparing to supply onions to European countries and Ukraine due to the rapid growth of vegetable prices. The global onion market is experiencing a crisis due to the war in Ukraine and weather problems, impacting the EU, India, Bangladesh, Asian countries, and the Philippines. India continues an embargo on exports until March. Onions are becoming more expensive in Ukraine, with prices increasing by 40% since Aug-23.

Egypt Extends Onion Export Ban Until Mar-24 Due to Rising Prices

The Egyptian Prime Minister has extended the ban on onion exports until March 30, 2024, amid rising onion prices in Egypt. The ban, which began in Oct-23, has been imposed to ensure local market supply and affordability. Onions are a staple in Egyptian cuisine and have seen a 95.9% year-on-year (YoY) increase in exports to USD 129.3 million in the first six months of 2023.

However, Egyptian onion exporters have expressed concerns about extending the export ban on onions, stating that it only affects the current season's volumes. They anticipate high global demand and price increases, leading to expansion of acreage and volumes. The ban aims to discourage attempts of exporters to supply onions for export due to the global market exceeding production.