1. Weekly News

Global

Global Onion Market Faces Mixed Trends: From Shortages to Overproduction

The global onion market is experiencing various conditions, with varying prices and supply dynamics across different regions. In North America, rising prices are linked to shifts in supply regions, although overall availability remains stable. Conversely, onion prices in China have reached historic highs due to poor weather conditions that have impacted quality and shelf life, discouraging consumer purchases. On the other hand, onion prices are declining in South Africa due to reduced demand following last season’s price drop.

In Egypt, overproduction led to a price collapse despite some ongoing exports, as farmers planted more onions in response to last year’s shortages. Italy presents a mixed scenario, with some regions benefiting from good yields while others struggle with low yields and storage issues. Austria’s ongoing harvest has driven export demand, particularly from Southeast and Eastern Europe. Meanwhile, the Netherlands' onion market remains stagnant, even as Israel begins its main harvest and imports from the Netherlands. France is dealing with quality issues due to high disease rates caused by unfavorable weather, resulting in significant price drops over recent months.

Egypt

Egyptian Onion Market Faces Overproduction and Low Demand in 2024 Season

The Egyptian onion season began in Apr-24 after a three-month export ban due to 2023's insufficient stocks and subsequent local price hikes. This year, overproduction has emerged as a critical issue, with many farmers increasing onion cultivation in response to the shortages and high prices from the previous season. Production has surpassed 3 million metric tons (mmt), an increase of 1 mmt compared to 2023. However, both domestic and international demand have been unexpectedly weak. Essential buyers like Saudi Arabia, typically a significant importer, have not shown the usual interest, leading to falling prices. The season began with lower prices than the exceptional highs of 2023 and has seen further price drops. Producers and exporters remain dissatisfied, with large quantities of unsold onions expected by the season's end well beyond the local market's needs.

Netherlands

Dutch Onion Exports Surged in W32 Driven by Senegal Market Opportunity

Dutch onion exports surged to nearly 25 thousand metric tons (mt) in W32, mainly driven by exports to Senegal. This boost occurred because Senegal temporarily opened its market to imported onions for four days, during which approximately 7 thousand mt of Dutch onions were shipped. The temporary shortage in Senegal created an opportunity for imports. Senegal, where around 1 thousand mt of onions are consumed daily, quickly filled the gap with Dutch onions.

Philippines

Philippines to Import 16 Thousand MT of Fresh Yellow Onions to Stabilize Supply Before Holiday Season

The Philippines will import 16 thousand mt of fresh yellow onions to ensure an adequate commodity supply before the holiday season. The volume is based on the country's monthly per capita consumption and is intended to fill the supply gap and stabilize market prices for the rest of the year. The Agriculture Secretary confirmed the approval of the issuance of sanitary and phytosanitary import clearance (SPSIC) for the importation. Moreover, the country's current stock is estimated to be depleted, prompting the need for imports.

Poland

Polish Onion Prices Remain Low Despite Larger Harvest Expectations

As the market transitioned between spring and overwintering onions, Polish onion wholesale prices increased, ranging between USD 0.23 to 0.34 per kilogram (kg) at the end of Aug-24. The current low price of onions in Poland is due to the anticipation of a larger harvest in 2024, coupled with the availability of competitively priced Dutch imports. Despite this increase, prices remain significantly lower than in previous years. While unfavorable weather conditions, such as summer heat and drought, caused some crop losses, forecasts still predict a larger Polish onion crop than in 2023. Additionally, Dutch onion prices have dropped considerably, allowing for competitively priced imports into the Polish market. As a result, current prices are 18% lower than the average of the past five years, though growers remain hopeful after two strong seasons.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W35 2023 to W35 2024)

India

In W35, onion prices in India surged significantly, increasing by 2.44% week-on-week (WoW), 31.25% month-on-month (MoM), and 110% year-on-year (YoY) to USD 0.42/kg. This sharp rise is due to a reduced Rabi onion acreage and lower-than-usual Kharif sowing. The planted area for the Rabi crop has drastically decreased from 1.23 million hectares (ha) in 2023 to 756 thousand ha in 2024. Although recent rainfall in critical regions like Nashik is expected to improve Kharif sowing, the reduced supply from the Rabi season has tightened the market, driving prices higher despite a drop in exports.

Mexico

Mexican wholesale onion prices decreased by 5.80% WoW and 41.44% YoY to USD 0.69/kg . This drop is primarily due to cold weather and frost that hindered crop development and harvesting in key producing states like Chihuahua, Guanajuato, and Zacatecas, impacting quality. Moreover, the longer-term price decline is due to a recovery from severe weather disruptions, including Hurricane Hilary in late Aug-23, which initially reduced local supply. However, increased imports later offset this, which helped stabilize the market.

Egypt

In W35, Egypt's wholesale onion prices remained unchanged WoW at USD 0.15/kg. Despite this stability, prices have plummeted by 70.59% YoY, primarily due to oversupply and sluggish demand. In 2023, Egypt experienced a significant onion shortage that drove prices to unprecedented levels, leading the government to impose a temporary export ban to protect domestic consumption. In response to last season's high prices, many farmers increased onion planting this year, resulting in a projected national production of over 3 mmt, up by 1 mmt from the previous year. However, this surplus is now met with sluggish demand, raising concerns about the market's ability to absorb the excess supply. Traditionally, markets like Saudi Arabia absorb much of Egypt’s onions, but demand is almost non-existent this year.

Spain

Spain's wholesale onion prices remained steady at USD 0.30/kg for the past month, though they have dropped 40% YoY. This sharp decline is mainly due to a surge in onion imports from China, which has exerted significant downward pressure on the market despite domestic solid production. Representatives from the Agrarian Association of Young Farmers (ASAJA) in Bolaños de Campos highlighted that this downward trend, initially triggered by rising imports, has worsened recently. Rising production costs and a severe shortage of skilled labor for harvesting are compounding the issue, creating additional difficulties for local producers.

3. Actionable Recommendations

Optimize Seed Quality and Production Efficiency

Investing in developing high-yield, drought-resistant onion varieties such as "Red Creole" and "Cypress" is essential to tackle the overproduction crisis in Egypt and stabilize onion prices. These varieties are known for their resilience to adverse weather conditions and higher yields than traditional types. Improved seed quality can enhance production efficiency and yield resilience, addressing current overproduction issues and future challenges. Additionally, adopting modern farming practices such as precision agriculture and advanced irrigation techniques, like drip or sprinkler systems, can further optimize production efficiency and manage supply levels more effectively. Implementing these measures will help Egyptian producers stabilize prices and better navigate market fluctuations.

Diversify Export Markets

Egyptian onion producers should broaden their export markets beyond traditional buyers like Saudi Arabia to mitigate risks associated with fluctuating demand. Exploring emerging markets in Southeast Asia and the Middle East, where demand for onions is growing, can provide new revenue streams and reduce dependence on a few key markets. Building relationships with buyers can unlock new opportunities, particularly in countries like India, where a growing population and urbanization are increasing onion consumption; Indonesia, with its expanding food market; and the United Arab Emirates (UAE), known for its robust food import market.. By diversifying export destinations and leveraging these emerging markets, Egyptian producers can stabilize the market and reduce reliance on traditional buyers.

Adjust Pricing Strategies and Prepare for Large Harvests

In South Africa and Poland, managing price fluctuations and market stability requires strategic adjustments in pricing and preparation for large harvests. Producers should analyze market trends and adjust pricing strategies to reflect current supply levels and demand. Implementing flexible pricing models accommodating varying market conditions will help maintain competitiveness and manage price volatility. For example, in South Africa, where reduced demand has led to price declines, producers should consider pricing adjustments based on real-time market conditions and explore new export opportunities to balance supply and demand. In Poland, preparing for a larger harvest by optimizing production practices and investigating new markets for export, such as Germany and the United Kingdom, can help stabilize prices and improve market performance. Producers can better navigate market fluctuations and ensure more stable pricing by adopting these strategies.

Sources: Tridge, Gmanetwork, Eastfruit, Agrotimes, Nieuwe Oogst, Agronaplo, Agrimaroc