1. Weekly News

India

Indian Onion Prices Surged to Five-Year Highs

Onion prices in India surged to a five-year high in W45 due to heavy rains damaging crops and delaying harvests, pushing inflationary pressures higher. In Pune, onion prices increased by 21% within four days, reaching over USD 9.00 per kilogram (kg) in some markets as of early Nov-24. This steep rise is forecasted to impact Nov-24’s inflation data significantly. The trend of rising vegetable prices observed in Oct-24 has intensified in Nov-24, with old onion prices at Lasalgaon, India’s largest onion market, jumping from USD 0.57/kg on November 4 to USD 3.05/kg on November 7. Market experts anticipate these high vegetable prices will persist through Nov-24, contributing to inflationary concerns.

Netherlands

Dutch Onion Exports Surged Due to Competitive Pricing and Increased Global Demand

Dutch onion exports in 2024 have shown strong growth compared to last year, with a significant increase in volume. During W43, exports reached over 38 thousand metric tons (mt), 14 thousand mt more than in 2023. Last year, high onion prices reduced exports in Oct-24 and Nov-24, which stayed between 23 and 30 thousand mt per week, with a temporary boost during the holiday season before declining again. This year, more competitive prices for Dutch onions, ranging from USD 0.14 to 0.17/kg for growers, boosted global demand, keeping processors busy and reflecting positively on export volumes. Meanwhile, total exports as of W42 had nearly reached 400 thousand mt, marking a 5% year-on-year (YoY) increase over the same period in 2023. Senegal was the top buyer, importing 8,400 mt, while Ivory Coast followed closely with 6,250 mt. Ivory Coast has notably increased its imports by 60% YoY, though Senegal’s imports have dropped by 24%, partly due to delayed border openings for imports.

Nigeria

Nigerian Onion Farmers Face High Costs and Post-Harvest Losses

Nigerian onion farmers face severe challenges, including rising production costs, post-harvest losses, inflation, and climate change impacts. According to the president of both the Regional Observatory of Onion Sector in West and Central Africa (ROO/WCA) and the National Onion Producers, Processors, and Marketers Association of Nigeria (NOPPMAN), these issues have led to over 50% losses within the onion value chain. The high costs of essential inputs, such as fertilizers, pesticides, fuel, and labor, have surged recently, with the cost of onion seedlings reaching unprecedented levels. If farmers cannot afford these inputs, onion production will decline, increasing prices and potentially threatening national food security. Post-harvest losses are a significant concern, with over half of the output wasted due to inadequate storage, limited preservation technology, and unreliable transportation systems. This trend impacts not only farmers' livelihoods but also the broader economy. Rising inflation compounds these difficulties, leaving many farmers unable to break even, further endangering their financial stability.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W45 2023 to W45 2024)

India

India’s onion prices surged 32.5% week-on-week (WoW) to USD 0.53/kg in W45, marking a 29.27% rise month-on-month (MoM) and a 26.19% increase YoY. Early Nov-24 saw consumers facing high onion prices as adverse weather impacted the crop and labor shortages. Market experts anticipate elevated vegetable prices throughout the month, intensifying inflationary pressures and raising consumer costs as demand for these essential commodities remains high amid supply setbacks. However, prices are expected to ease as red onions from Nashik Mandi begin to reach major markets. Furthermore, the new crop from Alwar is scheduled to arrive in northeastern cities, including Delhi, Haryana, and Punjab, which should further alleviate prices in open markets.

Netherlands

In W45, onion prices in the Netherlands held steady WoW at USD 0.15/kg but remained 25% higher MoM from USD 0.12/kg in W42. This season has been marked by challenges, including delayed sowing and heavy rainfall, leading to increased bacterial pressure and quality issues. These factors have introduced market stability and profitability uncertainties for growers, a contrast to previous years when profits were more immediate post-harvest. Demand continues to be robust, with strong interest from the United Kingdom (UK) and a rebound in exports to Africa, Central America, Malaysia, and Israel.

Mexico

In W45, Mexico's wholesale onion prices surged 35.58% WoW to USD 1.41/kg, up from USD 1.04/kg in W44, driven by seasonal supply shortages, adverse weather, heightened demand, and escalating production costs. The typical seasonal gap between harvests in October and November limited onion availability as inventories tightened. Moreover, recent droughts and heavy rains in crucial producing regions affected yields and quality, constraining the supply of market-ready onions. Strong export demand added further pressure, especially from the United States (US), where Mexico plays a crucial supply role. Rising production costs for inputs like fertilizers, fuel, and labor also contributed to the substantial WoW increase, resulting in significant monthly and yearly price hikes of 116.92% and 90.54%, respectively.

Egypt

Egypt's wholesale onion prices dropped 8.57% WoW and MoM to USD 0.32/kg. Driven by public agricultural programs, a shift towards onion farming in 2024 boosted Egypt's onion production to over 3 million metric tons (mmt), up by 1 mmt from last year. This increase in supply led to a significant price decline, with prices halving compared to the previous season. While the price drop aligns with higher supply, the unexpected factor has been the weak demand. Increased competition from other producing countries, like Spain and the Netherlands, has reduced global demand for Egyptian onions. However, the lower prices have opened opportunities in new markets, especially in West and Central Africa, where demand for yellow onions is vital in countries such as Senegal, Côte d'Ivoire, and Guinea.

Spain

In Spain, wholesale onion prices increased 9.52% WoW and MoM to USD 0.23/kg. This is due to significant disruptions caused by severe flooding in critical agricultural regions such as Valencia. Torrential rains and flash floods have damaged infrastructure, disrupted transportation, and affected supply chains. The flooding, exacerbated by the intense gota fría phenomenon, has resulted in widespread agricultural losses, tightening local onion supplies and increasing prices. However, prices are down 45.24% YoY. This is due to a 20% expansion in sown area and higher yields compared to last season, which have led to this oversupply, with Spanish onions facing limited demand from European markets already well-stocked with domestic produce. Since Jul-24, Spain’s onion supply has exceeded demand, as expanded production across Europe (except in France, where disease reduced yields) has restricted export opportunities.

3. Actionable Recommendations

Improve Storage and Production Efficiency

The onion industry in Nigeria faces severe challenges, including high production costs, post-harvest losses, and the impacts of climate change. One key recommendation is to improve the efficiency of onion production by adopting modern agricultural technologies, particularly in irrigation and seed selection. For instance, Nigerian farmers could benefit from investing in more drought-resistant onion varieties that can withstand unpredictable weather conditions and reduce yield losses during adverse seasons. In addition to better crop varieties, promoting controlled-environment agriculture (CEA) systems, such as greenhouses or hydroponics, could enhance production efficiency and reduce reliance on traditional rain-fed farming systems vulnerable to climate change. On the post-harvest side, enhancing storage facilities is vital. By introducing affordable, durable storage solutions like silos and improved cold storage systems, farmers can reduce losses caused by spoilage and transportation delays. In particular, incentivizing private sector investments in post-harvest storage technology and local processing could help create a more resilient onion supply chain, benefiting farmers and consumers. These actions would contribute to better market stability, improve farm income, and increase Nigeria's competitiveness in domestic and international onion markets.

Expand Export Opportunities for Dutch Onions

The Netherlands has seen strong export growth in onions, driven by competitive pricing and demand from regions like Africa and Central America. A strategic focus should involve expanding Dutch onion exports into new and emerging markets, such as Southeast Asia and South America, where demand for onions is rising due to changing dietary patterns and population growth. In these regions, particularly in countries with growing urban populations, onions are in increasing demand, offering an excellent opportunity for Dutch farmers. To support this expansion, Dutch onion producers should strengthen logistics and supply chain efficiency to deliver onions optimally. Moreover, fostering partnerships with food processors in critical international markets can help secure long-term contracts, providing a stable demand for Dutch onions. By diversifying into new markets and improving logistical capabilities, Dutch onion exporters can continue to grow their international presence, maintaining competitiveness despite the challenges posed by other global suppliers.

Enhance Post-Harvest Infrastructure

In India, the onion sector faces significant challenges due to crop losses caused by adverse weather conditions, which have strained supply chains. A critical recommendation is to invest in modern post-harvest infrastructure, such as cold storage facilities and improved transport systems, to ensure that onions are preserved for extended periods, reducing spoilage and waste. Enhance storage infrastructure, especially in regions with frequent weather-related disruptions. Onion can be stored for extended periods, providing a steady supply during off-season months. Moreover, encouraging the adoption of better packaging materials could help reduce physical damage during transportation, improving the shelf life of onions and reducing waste. These measures would help stabilize the market and alleviate inflationary pressures, ensuring a more consistent supply to both domestic and international markets while simultaneously boosting the profitability and stability of the onion sector.

Sources: Economic times, Nieuwe Oogst, Premium Times Ng