1. Weekly News

Bangladesh

Trading Corporation of Bangladesh Reports Sharp Rise in Onion Prices

In Bangladesh, onion prices have increased from USD 0.09 per kilogram (kg) to USD 0.14/kg (BDT 10/kg to USD 15/kg), impacting consumers. Local onions are now sold at USD 0.64 to 0.68/kg (BDT 70 to 75/kg), while imported onions are priced at USD 0.68 to 0.73/kg (BDT 75 to 80/kg). The Trading Corporation of Bangladesh reported a 20% week-over-week (WoW) rise in onion prices, with current prices exceeding 50% year-over-year (YoY). The onion harvest season has concluded, but many large-scale farmers still store onions. This decline in production was noted due to farmers harvesting immature onions in Mar-24 to achieve better prices.

India

India Lifts Onion Export Ban with Minimum Price and Duty Impositions

The Indian government lifted the ban on onion exports, imposing a minimum export price of USD 550 per metric ton (mt) and a 40% export duty effective on May 4, 2024. This follows the robust Kharif crop production in 2024, favorable monsoon forecasts, and stable market conditions at both mandi and retail levels. The official estimate for Rabi 2024 onion production is around 19 million tons, comfortably meeting the monthly domestic consumption of about 1.7 million tons. The export of onions was prohibited from December 8, 2023, to increase domestic supply against an estimated 20% decline in Kharif and late Kharif production. The removal of export restrictions is expected to bolster India's onion trade and contribute to the country's overall economic stability. With favorable crop conditions and ample supply, the move will likely benefit both domestic consumers and export markets, ensuring steady prices and abundant availability of onions in the coming months. Rabi onion accounts for 65% of India's onion production and meets consumer demand until the Kharif crop is harvested from October to November.

Morocco

Egyptian Onion Exports Surge Amidst Morocco's Export Ban to West Africa

Since Mar-23, Morocco has banned onion exports to West Africa due to a drought season, significantly increasing the demand for red onions from West African countries. Egyptian onion exports to Mauritania, Senegal, Guinea Conakry, Gabon, and others have increased by 200%. Egyptian onions are also being exported to various markets, including Europe, North America, and Africa. While traditional significant markets like the Netherlands, England, and Gulf countries continue to show solid demand, the Red Sea crisis severely affects trade with East Asia, leading to high freight costs that have slowed down onion exports. Despite strong demand, the abundant Egyptian harvest of onions this season, totaling around 1.8 million metric tons (mmt), has led to lower prices.

Sri Lanka

Sri Lanka Considers Importing Onions from Egypt

Sri Lanka’s Trade Minister and the Egyptian Ambassador discussed leveraging the Sri Lanka-Egypt Joint Commission on Trade and Economic Cooperation (JCTEC) to strengthen bilateral economic ties. They considered convening the next JCTEC session on Jun-24 and highlighted Africa's market potential. The Egyptian Ambassador suggested that Sri Lankan exporters use Egypt as a gateway, benefiting from relaxed rules of origin under a free trade agreement. The meeting also explored potential onion imports from Egypt to Sri Lanka and discussed enhancing cooperation through exhibitions and foreign delegations.

Turkiye

Turkish Onion Prices Saw Sharp Increase During Apr-24

The Union of Chambers of Agriculture of Turkey (TZOB) reported significant price differences between producer and market prices in Apr-24, with dried figs and onions showing the most significant gap. Onions saw the highest price increase in the Turkish market, while lemons had the highest increase at the producer level. On the other hand, eggplant experienced the most significant price decrease. Other products with notable differences included lemons, cauliflower, raisins, and potatoes. The TZOB is actively working to address these disparities in prices.

Ukraine

Ukrainian Farmers Raise Onion Prices Amidst Supply Shortage During W18

Ukrainian onion prices rose due to a decrease in supply caused by the seasonal depletion of onion reserves on Ukrainian farms and a slight increase in trading activity. Ukrainian farmers are offering onions at prices ranging from USD 0.30/kg to 0.45/kg (UAH 12/kg to 18/kg) in W18, a 39% WoW increase. However, buyer dissatisfaction with the quality of onions constrained the price. Despite this, producers are uncertain if they can continue raising prices due to the rapidly deteriorating quality of onions in storage.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W18 2023 to W18 2024)

India

In W18, onion wholesale prices in India surged by 110% YoY to USD 0.19/kg, compared to USD 0.09/kg in W18 of 2023, with an 11.18% WoW and month-on-month (MoM) change. This increase follows the government's lifting of a long-standing ban on onion exports, which benefits farmers in Nashik, a significant production area in western India. The Directorate General of Foreign Trade (DGFT) announced the removal of the export ban on May 4, 2024, leading to a significant shift in the onion market. Following the announcement, onion prices at Nashik's Agricultural Produce Market Committee (APMC) markets surged. The reopening of the export route has finally allowed farmers to see a return on their investment after months of stagnant prices.

Netherlands

The wholesale price of onions in the Netherlands has significantly dropped by 83.19% YoY from USD 0.70/kg to USD 0.12/kg in W18. Additionally, there is a decrease of 30.76% MoM and a 21.53% WoW in price change. This downward price trend can be due to a surplus of onions and lower demand, especially from Eastern Europe. The onion harvest in the Netherlands was good overall, with more supply than initially thought. However, there are some quality issues, particularly in the southwest of the Netherlands, as lower-quality onions are flooding the market.

Mexico

The wholesale price of onions in Mexico has notably decreased, with a 44.30% decline MoM and a 6.38% decrease WoW. Although there has been a significant 37.5% YoY increase during W18, it is essential to note that prices have demonstrated a consistent downward trend since W5. This price decrease may be due to the start of Mexican onion production, alleviating market pressures. Reports indicate that the supply of all onions is currently tight, particularly for white and red varieties. Moreover, Mexico has faced water shortages, resulting in smaller stocks from this region. However, the quality of the onion crop remains good.

Egypt

The increase in onion prices in Egypt by 27.59% YoY can be primarily due to increased demand from West African countries, which have turned to Egypt following Morocco's ban on onion exports. This heightened demand has driven prices up. However, the MoM and WoW decrease of 38.33% and 19.57%, respectively, suggest short-term fluctuations influenced by seasonal harvest cycles and market dynamics. Despite these fluctuations, the overall stability of prices from W18 2023 to W18 2024 indicates a balanced market, where the abundant harvest of around 1.8 mmt has likely helped maintain stable prices compared to the previous year.

Spain

Onion farmers in Valencia, Spain, faced challenges at the beginning of the tomato campaign, with low sales rates in the field and a majority presence of imported onions on distribution shelves. The Valencian Farmers Association (AVA-ASAJA) urged prioritizing local products such as tomatoes, priced at USD 0.36/kg in W18. Experts have described the campaign as disastrous, with excess produce and sluggish sales. Imported onions from New Zealand and Peru dominate the market, while local farms struggle with surplus crops. Low demand and prices below production costs concerned farmers, compounded by the expenses of phytosanitary treatments.

3. Other Outstanding Price Anomalies

Brazilian Onion Prices Surged by 205.98% YoY in May-24 Amid Supply Shortage and Strong Demand

In W18, Brazilian onion prices experienced a slight MoM decrease of 5.39%. However, there was a significant YoY increase of 205.98%, rising from USD 0.63/kg in May-23 to USD 1.93/kg in May-24. This consistent upward price trend throughout 2024 suggests strong market demand for Brazilian onions.

The current shortage of onions in Brazil is primarily due to the depleted onion supplies in the Ituporanga and Lebon Régis, Santa Catarina regions last month. This shortage has led to increased imports from Argentina to meet the customer demand. However, these imports face delays at the Porto Xavier border due to stringent sanitary inspections and a reduced workforce, exacerbating the supply shortage.

Furthermore, adverse weather conditions have resulted in limited onion yields in Irecê, Bahia, and the São Francisco Valley, impacting both the volume and quality of the harvest. Despite these challenges, the situation is expected to normalize, and more favorable weather conditions in the Northeast are anticipated.

4. Actionable Recommendations

Diversification of Sourcing and Import Channels

Onion importers, particularly in regions experiencing supply shortages like Bangladesh and Sri Lanka, should diversify their sourcing channels to mitigate risks associated with supply disruptions. Exploring alternative onion-producing regions and establishing partnerships with reliable suppliers are crucial steps in ensuring a stable and diversified supply chain. By expanding sourcing options beyond traditional suppliers, importers can better withstand fluctuations in production, weather-related challenges, and trade restrictions. Additionally, forging strategic alliances with suppliers in different geographic locations enhances resilience and reduces dependency on any single source of onions, thereby safeguarding against potential disruptions in the global onion market.

Monitoring and Adjustment of Pricing Policies

Onion traders and retailers should closely monitor global pricing trends and adjust pricing policies in response to fluctuations in supply and demand dynamics. Implementing flexible pricing strategies that account for changes in production levels, import tariffs, and currency exchange rates is essential to maintaining competitiveness and profitability in the onion market. By staying informed about market conditions and adjusting prices accordingly, traders and retailers can optimize revenue and mitigate risks associated with volatile market conditions. Additionally, adopting a proactive approach to pricing allows businesses to respond swiftly to changes in the onion market, ensuring sustained profitability and resilience in the face of uncertainty.

Investment in Storage and Preservation Technologies

Onion producers and traders facing seasonal fluctuations in supply, such as those in Ukraine and Turkey, should invest in advanced storage and preservation technologies to extend shelf life and minimize post-harvest losses. Exploring solutions such as cold storage facilities, controlled atmosphere storage, and dehydration technologies is crucial to ensuring year-round availability of onions and reducing dependency on seasonal harvests. By implementing these technologies, producers and traders can effectively preserve onions for extended periods, enabling them to meet market demand even during off-peak seasons. Additionally, investing in storage and preservation infrastructure enhances supply chain resilience and minimizes the risk of spoilage or wastage, ultimately contributing to the stability and sustainability of the onion industry.

Risk Management and Contingency Planning

Developing comprehensive risk management plans and contingency measures is essential to mitigate potential disruptions in the onion supply chain, such as adverse weather events, trade restrictions, or geopolitical tensions. By anticipating and preparing for these risks, onion stakeholders can effectively safeguard their operations and minimize the impact of unforeseen challenges. Additionally, maintaining strategic reserves and buffer stocks is crucial to buffering against sudden fluctuations in supply and demand. These reserves ensure continuity of supply and stability in prices during periods of market volatility, helping to maintain market equilibrium and meet consumer demand. By proactively managing risks and maintaining adequate buffer stocks, onion industry players can enhance resilience and mitigate the impact of external shocks on the supply chain.