1. Weekly News

Egypt

Costa Rican Markets Open to Egyptian Onion Exports

Egypt’s Minister of Agriculture announced that Costa Rican markets are now open to Egyptian fresh onion exports after successful negotiations between the agricultural quarantines of both countries. This move is part of Egypt's strategy to expand agricultural exports and boost foreign currency inflows. The first shipment of onions to Costa Rica has been approved for inspection. Costa Rica also imports grapes, citrus, strawberries, medicinal plants, and some vegetables.

India

Indian Government Steps Up Onion Price Control with Buffer Stock Release and Subsidized Sales

The Indian government has intensified its efforts to curb rising onion prices after removing export duty by increasing the sale of buffer stock in wholesale markets. The Consumer Affairs Secretary stated that the government has begun offloading 470 thousand metric tons (mt) of onions from its buffer stock in major cities like Delhi, with plans to expand subsidized retail sales nationwide. Onions will be sold locally at a subsidized rate of USD 0.42 per kilogram (INR 35/kg) in cities where prices exceed the national average. Retail prices have surged, reaching USD 0.66/kg (INR 55/kg) in Delhi, USD 0.69/kg (INR 58/kg) in Mumbai, and USD 0.72/kg (INR 60/kg) in Chennai.The government is also optimistic about the upcoming Kharif onion crop and is closely monitoring other commodities like edible oils, tomatoes, and pulses, ensuring stability through interventions and import adjustments.

Ukraine

Heavy Rains in Southern Ukraine Lead to Onion Price Surge

Onion prices in Ukraine have increased by 16% since the start of the week due to heavy rains in the southern regions, which forced farmers to halt harvesting. Prices now range between USD 0.24 to 0.36/kg (UAH 10 to 15/kg). The supply reduction and rising demand from wholesale buyers have driven up prices. The rain could impact the quality of the remaining onions in the fields, prompting farmers to store higher-quality produce and sell only small quantities. Current prices are similar to last year's levels.

Hot and Dry Weather in Ukraine Reduces Quality Onion Harvest

Due to extreme heat, Ukraine is facing a shortage of quality onions this year, with even drip irrigation failing to help crops mature properly, particularly in the Dnipropetrovsk region. Many onions remain undersized, which is expected to lower prices early in the season. However, prices could rise significantly after the New Year, with high-quality onions from professional storage facilities predicted to sell at USD 0.48 to 0.72/kg (UAH 20 to 30/kg). Although onions grew better in Western Ukraine, large-scale production is concentrated in the southern regions, making it difficult to relocate operations entirely to the West.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W38 2023 to W38 2024)

India

Onion prices in India have surged to USD 0.52/kg in W38, reflecting a 10.64% week-on-week (WoW), 23.81% month-on-month (MoM), and 160.00% year-on-year (YoY) increase, driven by significant supply shortages and rising demand. The sharp price rise YoY is primarily due to a substantial reduction in Rabi onion acreage in 2024, limiting market supply. Additionally, irregular rainfall in key onion-growing regions like Nashik delayed Kharif sowing, further constraining availability. While the Indian government has intervened by releasing 470,000 mt of buffer stock and selling onions locally at a subsidized rate of USD 0.42/kg, retail and export prices remain high. Strong export demand and favorable weather conditions boosting onion quality have also contributed to upward price pressure. Although recent rains may improve future Kharif sowing, the current supply shortfall will likely keep prices elevated in the near term.

Mexico

Mexican onion prices have seen a slight recovery to USD 0.70/kg in W38 2024, marking a 6.06% WoW and 7.69% MoM increase, though still down by 16.67% YoY. The recent price increases are influenced by cold weather and frosts in key producing regions like Chihuahua, Guanajuato, and Zacatecas, reducing the quality and quantity of onions. Despite these supply challenges, lower domestic production quality and the supply management through imports have kept prices relatively contained, although still below last year's levels.

Egypt

In W38, Egyptian onion prices rose to USD 0.18/kg, reflecting a 5.88% WoW increase and a 20% MoM rise, though prices remain down 68.42% YoY. The WoW and MoM rises can be attributed to constrained supply as the harvest season concludes, resulting in lower available volumes. The recent price drop stems from an oversupply this season following last year's onion shortage and a temporary export ban. Additionally, Egypt is negotiating to open markets in emerging countries, which may boost demand in the coming months and drive up export prices.

Spain

In W38, Spanish onion prices fell to USD 0.25/kg, reflecting a 3.85% WoW decrease, 16.67% MoM decline, and a 45.65% YoY drop. This sustained price decline is due to a combination of weak demand and excess supply, making it challenging for local exporters to remain competitive internationally. The 2024 season saw a substantial increase in onion planting. High stocks across other European markets, including the Netherlands and Germany, worsened the situation. The glut from early harvests and higher yields has created a temporary oversupply, pushing prices to significantly lower levels compared to the previous year.

3. Actionable Recommendations

Optimize Supply Chain Management for Onion Producers in India

To effectively manage the supply chain in India amidst the significant onion price surge, producers should focus on optimizing logistics to ensure efficient distribution of buffer stock while leveraging government subsidies. Implementing advanced inventory management systems will allow for real-time tracking of stock levels, facilitating quick responses to market fluctuations. Diversifying crop planting schedules and adopting drought-resistant onion varieties can help mitigate the impact of irregular rainfall, ensuring a more consistent supply and stabilizing prices. Engaging in community-based programs, such as knowledge-sharing workshops, will empower farmers with best practices in crop management and risk mitigation, ultimately helping producers navigate price volatility and strengthen their market position.

Expand Onion Exports to Latin America

Onion exporters should strategically target emerging markets in Latin America to diversify their export portfolios and mitigate risks associated with traditional markets. Countries such as Costa Rica, Peru, and Chile present significant opportunities due to their increasing demand for fresh produce and favorable trade agreements with Egypt, India, and Mexico. Exporters should conduct thorough market research to understand local consumption patterns and preferences, tailoring their products accordingly, such as offering smaller packaging sizes for retail markets. Establishing partnerships with local distributors and retailers can facilitate market entry and enhance supply chain efficiency. Additionally, participation in trade shows and agricultural fairs in these countries will increase brand visibility and foster direct connections with potential buyers. By prioritizing these new markets and adapting their strategies to local needs, onion exporters can capture growing opportunities in the Latin American region while reducing dependency on existing markets.

Add Sustainable Practices to Ukrainian Onion Farming

To combat the quality issues resulting from extreme weather, Ukrainian onion producers should adopt sustainable farming practices, including enhanced irrigation techniques like drip irrigation systems, which can significantly reduce water usage and improve moisture levels during dry spells, particularly in regions like Dnipropetrovsk. Implementing crop rotation strategies, such as alternating onion crops with legumes like soybeans or peas, can enhance soil fertility and reduce pest pressures, a practice successfully used in Kharkiv. Additionally, investing in research for more resilient onion varieties developed by institutions like the Institute of Horticulture in Ukraine can improve yield stability and resistance to climate stressors. Also, utilizing drones for crop monitoring and data analytics can enable farmers to assess crop health and soil conditions in real time, ensuring timely interventions that enhance onion quality and yield. By integrating these practices and technologies, producers can effectively tackle the challenges posed by extreme weather while improving the overall resilience of their onion production systems.

Sources: Tridge, Agro Business, Agro Portal, Al Falah Today, East Fruit, The Economic Times