Weekly Product Updates

W15 Onion Update: Egypt's Onion Ban Reversal and Its 62% Price Drop in Q1-24, India's Onion Traders Report Price Discrepancies in UAE Exports, and South Korean Farmers Concerned About Low-Tariff Onion Quotas

Fresh Onion
Published Apr 18, 2024
In W15 in the onion landscape, onion prices in Egypt, South Korea, India, and Brazil have all experienced significant price drops due to export bans, low tariffs, and insect infestations. The Egyptian government initially imposed an export ban on onion prices from Oct-23 to Mar-24 to stabilize the domestic market. However, reports showed a surplus and a high harvest, leading to a 62% decrease in onion prices. Meanwhile, South Korean farmers are concerned about low tariff quotas, while India's traders report discrepancies in export prices to the UAE. Lastly, the Indian government is implementing a direct benefit transfer system to support onion farmers.

Egypt's Onion Export Ban Reversal Leads to 62% Price Drop

In response to escalating onion prices in Egypt, the government initially imposed an export ban from October 1, 2023, to March 30, 2024, to stabilize the domestic market. However, this measure was later reversed after reports from the ministries of Agriculture, Trade, and Industry indicated a surplus of onions and an expected bountiful harvest. As a result, onion prices in Egypt saw a dramatic decrease of 62% in Q1-24, stabilizing at USD 309.27 per metric ton (mt) (EGP 15,000/mt). This was a significant drop from the USD 824.73/mt (EGP 40,000/mt) recorded in Q4-23.

South Korean Farmers Concerned Over Low-Tariff Onion Imports in Apr-24

Concerns have been raised among farmers in major onion-producing regions like Jeju and Jeonnam in South Korea over the government's plan to release 5 thousand tons of onions with a low-tariff quota (TRQ) in Apr-24. This move, which applies a 50% tariff instead of the usual 135%, aims to prevent shortages. However, farmers are worried that the influx of lower-priced imported onions may lead to declining local market prices, affecting their livelihoods. The volume of TRQ onions released may be adjusted based on domestic supply and demand.

Indian Onion Exporters Highlight Pricing Discrepancies in UAE Market

Despite international high prices, India's traders have reported discrepancies in onion export prices to the United Arab Emirates (UAE). Despite a 40% export tax in Dec-23, India facilitated the export of 14.4 thousand tons of onions to the UAE, responding to diplomatic engagements. The global onion market has experienced price surges, partly due to export restrictions from Pakistan and Egypt, while Indian exports were transacted at lower rates. This situation arises amid India's export ban and domestic shortfall.

Indian Government's Measures to Support Onion Farmers

The Indian government is implementing a direct benefit transfer system to expedite payments to farmers for onion purchases at market rates. National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and the National Cooperative Consumers' Federation of India Ltd. (NCCF) are tasked with procuring 0.25 mmt each, contributing to a buffer target of 0.5 mmt. Starting in 2024, federations storing onions must allocate at least 85% of their stock for market intervention, with a cap on storage losses at 15%. Additionally, 60% of the onions supplied must meet Grade-A quality standards. Proposals are in place to leverage the National Agriculture Market platform for transparent onion sales and equip transport trucks with GPS for real-time tracking.

Insect Infestation Threatens Brazilian Onion Imports from Argentina

Brazil is dealing with a significant agricultural issue caused by an insect infestation in onions imported from Argentina. This problem mainly affects Porto Xavier and São Borja in Rio Grande do Sul. The infestation has initiated a pest risk alert protocol, threatening Brazilian agricultural production. Efforts are underway to identify quarantine species, with pests already found in São Borja and Dionísio Cerqueira. However, the response is complicated by a shortage of federal agricultural tax auditors at the border, hindering the efficient inspection and release of imported agricultural goods. This situation is impacting Brazil's food security and agricultural safety.

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