1. Weekly News

Global

Global Onion Market Faces Challenges Due to Regional Trends and Quality Issues

In North America, onion prices are rising due to shifts in supply regions, though availability remains steady across sizes and colors. Conversely, onion prices have remained unusually high in China since last October due to adverse weather affecting quality and shelf life, which has also reduced consumer demand. The Philippines is addressing its market needs by importing 16 thousand tons of yellow onions. South Africa is experiencing a downward trend in onion prices following last season’s price drop. In Egypt, increased production has led to a surplus and lower prices.

In Europe, Italy faces mixed results with weather-related damage affecting some regions, while Germany struggles with quality issues and significantly lower wholesale prices. Austria is seeing increased export demand from Southeastern and Eastern Europe, whereas the Netherlands has very low market prices and a negative market outlook. Israel has begun its main onion harvest, with imports from the Netherlands supplementing local production. In France, quality issues due to poor weather have led to dramatic price decreases over the past few months, and Spain is recovering from a period of exceptionally low onion prices.

Egypt

Egypt's Onion Surplus Creates Persistent Challenges Amid Weak Demand and Falling Prices

As of Sep-24, Egypt's onion season continues to face significant challenges despite the resumption of exports in Apr-24 after a three-month ban. Last year's onion shortage, which led to soaring domestic prices and a government-imposed export halt, motivated farmers to increase production this year, resulting in a bumper crop of over three million tons, a million more than in 2023. However, the anticipated demand, especially from key markets like Saudi Arabia, has remained weak, causing a persistent onion surplus. Prices have continued to fall since the season began, leaving producers and exporters with large unsold volumes and significant financial pressures. This ongoing situation has dampened expectations for the season, turning what was hoped to be a recovery year into one marked by excess supply and diminished demand.

India

Government Launches Subsidized Onion Sale in Delhi-NCR and Mumbai

On September 5, 2024, the Indian government initiated a subsidized onion sale at USD 0.42 per kilogram (INR 35/kg) in Delhi-NCR and Mumbai to counter rising prices. The National Co-operative Consumers’ Federation (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are managing the sale through their stores, mobile vans, and e-commerce platforms. Currently, retail onion prices exceed USD 0.71/kg (INR 60/kg). The government plans to expand this initiative to other major cities starting next week. With increased kharif sowing and substantial onion stocks, the outlook for availability and pricing is expected to improve.

Peru

Peru's Onion Exports Surge YoY in Jul-24

In Jul-24, Peru's onion exports grew significantly, reaching 37,402 tons valued at USD 19.7 million, a 62% increase in volume and an 89% rise in value compared to Jul-23. The United States (US) remained the largest market, importing 16,153 tons, with export value rising 19% to USD 11.4 million due to a 50% price increase. Colombia emerged as a key market, with imports rising over 16-fold to 11,343 tons and export value growing 18 times to USD 2.8 million. The Dominican Republic also saw a 23-fold increase in volume, importing 3,275 tons, valued at USD 2.7 million.

Spain

Increased Onion Planting in Spain Affects Pricing

In Spain, there was a notable increase in onion planting this year, particularly for the low-water-requirement Medio Grano variety. This onion surplus coincided with high stocks in the Netherlands, Germany, and other European markets. The early harvest and high yields led to a temporary glut, causing prices to fall significantly.

Ukraine

Onion Prices Halve in Kirovohrad Oblast Amid Harvest Season

In Kirovohrad Oblast, Ukraine, onion prices have nearly halved, now ranging from USD 0.24 to 0.34/kg (UAH 10 to 14/kg). This drop is attributed to the current harvest season, with prices expected to rise once the onions are stored. Local sellers advise taking advantage of the lower prices for winter storage. Farmers are selling freshly harvested onions at USD 0.19/kg (UAH 8/kg). Market dynamics and the distinction between young and mature onions also influence pricing. The region's onion cultivation area remains at 2.7 thousand hectares (ha), with an expected yield of 37 thousand tons, sufficient for local needs.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W36 2023 to W36 2024)

India

In W36 2024, Indian onion prices rose to USD 0.46/kg, up from USD 0.42/kg in W35 2024, representing a 9.52% week-on-week (WoW) increase. This follows a 21.05% month-on-month (MoM) rise from USD 0.38/kg in W33 2024 and a significant 119.05% year-on-year (YoY) increase from USD 0.21/kg in W36 2023. The sharp rise in onion prices can be attributed to a significant reduction in Rabi onion acreage, which dropped from 1.23 million ha in 2023 to 756,000 ha in 2024, causing a supply shortage. Additionally, delayed Kharif sowing due to irregular rainfall in key growing regions, such as Nashik, has further strained the market. Despite the government's effort to subsidize prices by selling onions at USD 0.42/kg through the National Co-operative Consumers’ Federation (NCCF) and National Agricultural Cooperative Marketing Federation of India (NAFED), retail prices have exceeded USD 0.71/kg, reflecting the ongoing supply tightness. The recent rains may improve future sowing, but current supply remains constrained, keeping prices elevated.

Mexico

In W36 2024, Mexican onion prices dropped to USD 0.57/kg, down from USD 0.65/kg in W35 2024, representing a 12.31% decrease WoW. This follows a 16.18% MoM decline from USD 0.69/kg in W34 2024 and a significant 43.56% YoY drop from USD 1.01/kg in W36 2023.Mexican onion prices have consistently declined in recent weeks, despite challenges such as cold weather and frosts affecting supply. In key producing states like Chihuahua, Guanajuato, and Zacatecas, the quality of available onions has diminished, leading to lower prices. This reduction in quality and quantity has driven prices down. Moreover, the increase in onion imports has played a significant role in this trend, helping to manage local supply imbalances and stabilize prices by supplementing domestic availability.

Egypt

Egyptian onion prices have been fluctuating recently. As of W36 2024, prices have fallen to USD 0.14/kg, a decrease of 6.67% WoW from USD 0.15/kg in W35 2024. This follows a dramatic 73.08% decline from USD 0.52/kg in W36 2023 (YoY). The current price drop is due to an oversupply of onions following last year’s shortage, which led to a temporary export ban. Despite resuming exports in Apr-24 and a bumper crop of over three million tons, demand from key markets like Saudi Arabia has remained weak. This surplus, coupled with low demand, has pressured prices and created financial challenges for producers and exporters, turning a hopeful recovery year into one marked by excess supply and reduced prices.

Spain

As of W36 2024, Spanish onion prices stood at USD 0.28/kg, a decrease of 6.67% WoW from USD 0.30/kg in W35 2024, with the same decline displayed for MoM. This follows a sharper 39.13% YoY drop from USD 0.46/kg in W36 2023. The decrease is primarily attributed to a substantial increase in onion planting in 2024, especially for the low-water-requirement Medio Grano variety, which led to a temporary glut in the market. This oversupply, combined with high stocks in other European markets such as the Netherlands and Germany, has pushed prices down. Additionally, a surge in onion imports from China has further exacerbated the price decline, putting additional downward pressure on the Spanish market despite solid domestic production.

3. Actionable Recommendations

Enhance Quality and Diversify Export Markets

To counteract the consistent decline in onion prices, Mexico should implement measures to enhance onion quality and explore new export markets. Improving onion quality can be achieved through better agricultural practices, such as adopting advanced irrigation techniques, pest management strategies, and soil enrichment to produce higher-grade onions. Investing in quality control and grading systems will also ensure consistency and meet international standards. Additionally, Mexico should consider expanding its export markets to regions with growing demand, such as Southeast Asia and the Middle East. Strengthening trade relationships with emerging markets in these regions through targeted marketing and strategic partnerships can help diversify export destinations and mitigate the impact of increased imports and supply imbalances, ultimately stabilizing prices and creating new revenue streams.

Target New Markets and Optimize Storage

Address the surplus issue in Egypt by targeting new international markets and refining export strategies to manage the excess supply. In light of weak demand from traditional markets such as Saudi Arabia, Egypt should explore emerging markets with growing demand for onions, such as Southeast Asia (e.g., Vietnam and Thailand), Africa (e.g., Nigeria and Kenya), and the Middle East (e.g., UAE and Qatar). Expanding into these regions could help absorb the surplus and balance production levels with market needs. To further mitigate financial pressures, Egypt should optimize storage and distribution processes by investing in modern storage facilities with climate control to extend shelf life and reduce spoilage. Implementing efficient logistics and inventory management systems can streamline distribution, reduce costs, and improve market responsiveness. Engaging with trade partners and industry stakeholders to forecast demand accurately and align production accordingly will also contribute to achieving a better market equilibrium.

Adjust Planting Strategies and Improve Market Access

To manage the oversupply and stabilize prices, Spain should adjust its planting strategies to align production levels with market demand and avoid future gluts. This involves careful planning of planting volumes based on market forecasts and adjusting the cultivation of varieties, such as the Medio Grano, to match consumer preferences. Improved market access can be achieved through strategic partnerships and enhanced export opportunities. For example, Spain could engage with emerging markets in North America and the Middle East, where there is increasing demand for onions. Additionally, optimizing storage and distribution processes will help manage excess inventory. Investing in advanced storage facilities, such as those equipped with controlled atmosphere technology, can extend the shelf life of onions and reduce spoilage. Streamlining logistics and enhancing inventory management, perhaps by employing real-time tracking systems, will ensure that supply is better aligned with demand and mitigate the impact of high imports, such as those from China.

Sources: Tridge, Agrimaroc, Agraria Pe, Agro Peru, Agroportal UA, Fresher, Fresh Plaza, İhlas Haber Ajansı, The Print,