1. Weekly News

India

Indian Onion Prices Surge as Crop Shortages Hit Market

The rising prices of onions in India in Sep-24 forced consumers to cut back on their purchases. Typically, the onset of the monsoon season increases supply, resulting in lower prices. By winter, prices usually stabilize, with farmers often leaving crops unharvested until they become more affordable. However, this year has seen adverse weather conditions, heavy rains, severely damaging crops across the state and causing widespread shortages. Market experts anticipate that prices may continue to rise as the shortage worsens. Local onion production has significantly declined, prompting traders to rely on imports from Maharashtra.

Netherlands

2024 Onion Season in the Netherlands

The 2024 onion season in the Netherlands is markedly different from previous years as demand remains strong, with regular destinations like the United Kingdom (UK) actively purchasing large quantities of onions. While Africa was slightly slow in starting this season, there are signs that exports to that region are beginning to pick up. Moreover, the current low prices have attracted interest from farther destinations such as Central America, Malaysia, and Israel. However, caution is needed with longer-distance shipments, as onions can remain in a container for four to five weeks.

Turkey

Onion Harvest Completed in Malatya's Akçadağ District

The onion harvest in Malatya's Akçadağ district, specifically in the Ören Neighborhood, has successfully concluded in W40, with farmers' plans for export to European countries. This year, the harvest covered an area of approximately 250 hectares (ha), yielding about 4 metric tons (mt) of onions per acre. The Malatya Chamber of Commerce (MTB) president emphasized the significant role of recently constructed dams in enhancing regional agricultural diversity. Onions were grown in areas previously dedicated to different crops, demonstrating Malatya's potential for various farm products. With high yields achieved in this first-time onion harvest, there are plans to expand production in more significant areas in the coming years, emphasizing efficient water use to support this growth.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W40 2023 to W40 2024)

India

In W40, onion prices in India reached USD 0.47 per kilogram (kg), marking a 14.55% week-on-week (WoW) decrease. However, this decline comes amidst a significant 123.81% year-on-year (YoY) price increase, primarily driven by severe supply shortages and rising demand. The substantial YoY price spike is due to a notable reduction in Rabi onion acreage for 2024, which has constrained overall market supply. Moreover, heavy rains have further exacerbated the situation, severely damaging crops across the state and leading to widespread shortages. As a result, market experts predict that prices may continue to rise as the shortage worsens. Local onion production has significantly declined, compelling traders to depend on imports from Maharashtra to meet demand.

Mexico

In W40, Mexican onion prices rose to USD 0.73/kg, marking a 4.29% WoW, 10.61% month-on-month (MoM), and 2.82% YoY increase. This surge is due to cold weather and frosts impacting key production regions like Chihuahua, Guanajuato, and Zacatecas, leading to reduced yields and lower quality. Despite these supply challenges, prices have remained relatively stable due to adequate supply management through imports, helping to keep prices below last year's levels, even though domestic production quality has been affected.

Egypt

In W40, Egyptian onion prices rose to USD 0.23/kg, marking a 21% WoW increase and a 35.29% MoM rise. However, prices are still down by 62.90% YoY. The recent WoW and MoM price increases are due to constrained supply as the harvest season concludes, resulting in lower available volumes. The significant YoY price drop is due to an oversupply this season following last year's onion shortage and a temporary export ban. Egypt is also negotiating to open markets in emerging countries, which could boost demand and increase export prices in the coming months.Spain

Spain

In W40, Spanish onion prices fell to USD 0.22/kg, representing a 4.35% WoW decrease, a 15.38% MoM decline, and a substantial 52% drop YoY. The price decline is driven by weak demand and excess supply, with local exporters struggling to compete internationally. Imports from Chile, Senegal, and Peru have saturated the market. Additionally, early harvests in regions like Valencia and Andalusia faced difficulties, while Central Spain anticipates good production despite sowing delays due to weed problems in Jun-24.

3. Actionable Recommendations

Launch an Onion Marketing Campaign for New Markets

Egypt should initiate a targeted marketing campaign to promote its onions in emerging markets including Southeast Asia, specifically countries like Vietnam, Indonesia, or Malaysia. With negotiations underway to access new regions, Egypt can emphasize its onions' high quality and competitive pricing, particularly in countries with supply constraints. Working with trade associations and export agencies, Egypt can hold promotional events, attend international trade fairs, and collaborate with significant retailers to enhance visibility and demand for Egyptian onions. This could lead to better export prices and increased market penetration.

Strengthen Weather-Resilient Farming Practices

India should prioritize promoting weather-resilient farming practices, including adopting drought-tolerant onion varieties such as Arka Kalyan, Bhima Super, and N-53. These varieties are known for their resilience to dry conditions and erratic weather, making them suitable for regions that experience fluctuating rainfall. Furthermore, improving irrigation systems, particularly drip irrigation, will help ensure crops receive a consistent water supply, reducing the risk of damage from droughts and heavy rains. Given the adverse impact of excessive rainfall on onion production this season, farmers need better training on managing crop risks linked to unpredictable monsoon patterns. These practices will improve water retention and soil health, helping crops withstand weather variability.

Diversify Export Markets to Manage Supply

The Netherlands should further diversify its onion export markets to reduce reliance on any single region and minimize risks associated with long-distance shipments. While the UK remains a crucial buyer, the growing interest from Central America, Malaysia, and Israel suggests an opportunity to establish stronger trade relationships in these regions. By investing in advanced post-harvest technologies, such as better storage and preservation methods, the Netherlands can safely extend the shelf life of onions during long transportation periods, ensuring product quality upon arrival and reducing losses due to spoilage.

Sources:Tridge, Iha, Times of India, Fresh Plaza