W51 Onion Update: Exports Surge in Uzbekistan, Onion Production Challenges in Ukraine, and Price Fluctuations in South Asia

Uzbek Onion Exports Surge in Dec-23, Showing Significant Growth in Foreign Markets

Uzbek onion exports experienced a surge in Dec-23 due to increased activity from exporters in foreign markets. Logistics service providers reported a significant increase in transportation demand for onion exports in Nov-23 and Dec-23. The shipment's primary destination was Latvia, accounting for about a third of the total transport requests. Poland followed closely behind, followed by Russia, Belarus, and Georgia. Onions were occasionally transported to Greece, Spain, Norway, and Romania. By the end of 2023, Uzbekistan is expected to be a significant success in fresh produce exports, with about 245 thousand tons from Jan-23 to Nov-23, a 33% year-on-year (YoY) increase and a 22% increase in 2021. The number of countries importing Uzbek onions has increased by at least 50%.

Onion Farmers in Nigeria Anticipate Significant Price Increase in 2023 Due to High Fuel Costs for Irrigation Machinery

Onion farmers in Kano State in Nigeria anticipate a significant increase in onion prices in 2023 due to the high fuel cost required for irrigation machinery. The Kano Onion Farmers Association's secretary has highlighted the challenges farmers face, who are already grappling with economic issues. They argue that the high fuel cost will likely maintain onion prices at an elevated level, with any decrease estimated at no more than 2%. The reliance on fuel for irrigation machines has become a financial burden for farmers, impacting the entire onion supply chain. The unprecedented rise in fuel costs poses a unique challenge to onion farmers, prompting concerns about potential shortages in the market.

Ukraine's Onion Market Faces Challenges with Geopolitical Factors, Quality Issues, and Price Fluctuations

The onion market in Ukraine has experienced significant changes since Dec-23, influenced by internal production challenges and external geopolitical and environmental factors. The complex pricing patterns observed at the end of 2023 are attributed to internal production challenges, external geopolitical and environmental factors, and the quality of harvested onions. The quality of onions has deteriorated due to non-compliance with modern cultivation methods, and experts predict that prices may continue to fall as lower-quality products are sold.

Rapid Increase in Onion Prices in Ukraine Sparks Uncertainty Among Consumers and Growers

In addition, onion prices in Ukraine are increasing rapidly, with the average wholesale price reaching USD 0.37 per kilogram (UAH 14/kg). Since the start of the late onion harvest in Aug-23, the Ukrainian market has seen a 40% YoY increase. This is faster than the previous season when onion prices broke all historical records. At that time, the wholesale price peaked at USD 1.28/kg (UAH 48/kg), and retail prices were significantly higher. The weekly price monitoring shows that onion prices at the end of the first ten days of December in the 2022/23 season have only increased by 25% compared to prices at the start of the harvest. However, the price level during the 2022 onion harvest was significantly higher than in 2023. Ukrainian consumers and growers are uncertain about whether onion prices will set new records or fall by spring.

Indian Onion Prices Drop by 50% After Government Bans Exports

Onion prices in wholesale markets in India have fallen by about 50% after the government banned its exports on December 7, 2023. The average wholesale price of onion at Lasalgaon Agricultural Produce Market Committee (APMC) stood at USD 0.24 to 0.25/kg (INR 20 to 21/kg), a decrease from USD 0.47 to 0.48/kg (INR 39 to 40/kg) just before exports were banned. The central government imposed a minimum export price (MEP) on onion, followed by a complete export ban on December 7, 2023. Indian onion farmers are hopeful that the government may reconsider its decision, similar to the partial revision of the decision to ban the diversion of sugarcane juice for ethanol. The arrival of kharif onion, also known as red onion, has increased substantially, putting pressure on prices. However, good demand for onions nationwide may help stabilize prices for a few days. Onion arrival data from wholesale markets shows a higher arrival of kharif onions than expected by the government.

India's Onion Export Restrictions Impact Prices in Myanmar, Prompting Negotiations with the Philippines

India's restrictions on onion exports led to a rise in onion prices in Myanmar, which had been falling due to India's restrictions. A significant exporter of onions to the Association of Southeast Asian Nations (ASEAN) countries like Bangladesh, India has restricted onion exports until Mar-24 to ensure domestic food sufficiency. The price of onions at cargo trading stations has risen to USD 1.92 to 2.44/kg (MYR 4,000 to 5,100/kg) for old onions in the hot season and new onions in the rainy season. The Philippines is negotiating for the government-to-government acquisition of Myanmar onions.

Onion Prices Surge in Bangladesh Following India's Export Ban

In addition, onion prices in Bangladesh have risen from around USD 1.10 to 1.65/kg (BDT 100 to 180/kg), a rise from USD 0.92 (BDT 100/kg) a few weeks ago. The price spiked after India banned onion exports until Mar-24. However, supply chain disruptions and businesses' unwillingness to import onions from other countries have caused the price to increase again. Importers are concerned about profit potential and refrain from importing onions from other countries. The market currently has both locally produced and imported onions.