1. Weekly News

India

India's Onion Prices Declined as Fresh Kharif Crop Arrives

Indian onion prices are declining with the arrival of the fresh Kharif crop, according to a senior official from the Ministry of Consumer Affairs. Currently, the average all-India retail price of onions stands at USD 0.64 per kilogram (kg), marking a decline over the past month, mainly due to the government's subsidized sale of onions in key consuming centers. To ease the burden on consumers, the government has been selling buffer stock onions at a subsidized rate of USD 0.41/kg in Delhi and other cities. The government currently holds a buffer stock of 450 thousand metric tons (mt) of onions, of which 150 thousand mt have already been sold. The government transported the buffer stock onions to major consuming centers via rail for the first time, a strategy to boost supply. About 4,850 mt of onions have been supplied by rail recently to Delhi, Chennai, and Guwahati, with Delhi receiving the largest share of 3,170 mt. The government plans to continue bulk rail transportation until the stock is exhausted and prices stabilize.

Nigeria

Nigeria's Onion Industry Declared State of Emergency Amid Rising Costs and Climate Challenges

The National Onion Producers, Processors, and Marketers Association of Nigeria (NOPPMAN) has declared a state of emergency in the onion industry, citing severe challenges that threaten its survival. Key concerns include skyrocketing costs of onion seedlings, farm inputs, labor, and inflation, all aggravated by climate change. Extended rainfall patterns and unusual weather conditions have disrupted traditional growing cycles, resulting in crop diseases, waterlogging, and reduced yields. These factors have significantly hindered farmers' ability to plan, plant, and harvest effectively, eroding their profitability and endangering the sector's stability. NOPPMAN’s President underscored the broader impact of Nigeria's economic situation on the onion industry, urging swift action. Addressing post-harvest losses, which is a critical issue for farmers, is essential. This requires investments in improving infrastructure, such as modern storage facilities, and accessible financing to enhance the sector's resilience and ensure sustainable growth. Collaborative efforts among government bodies, financial institutions, and industry stakeholders are vital to overcoming these challenges and safeguarding the onion industry's future.

Peru

Peru's Onion Exports Surged in Oct-24

Peru exported 47,873/mt of onions in Oct-24, generating USD 27.4 million, reflecting a 35% year-on-year (YoY) increase in volume and 88% YoY growth in value. The average export price rose by 39% YoY to USD 0.57/kg, supported by solid demand and a steady supply that prevented restrictions seen in 2023. Onions primarily came from Ica, which accounted for about 64%, followed by Lambayeque contributing 13%, Arequipa contributing 12%, and La Libertad with 10%, with smaller contributions from other regions. The United States (US) was the top destination, absorbing 72% of exports at USD 0.70/kg, while Spain followed with 16% of the total. Peru's ability to maintain export growth amidst favorable market conditions reinforces its position as a key exporter in the global onion market.

Ukraine

Ukrainian Onion Prices Declined by 20% YoY in W46 Due to Increased Supply

During W46, Ukrainian onion prices dropped as farmers reduced their selling prices due to various factors. Onion demand has significantly weakened while the supply has surged, as small farms are eager to sell off their stocks before the onset of frost. Many farmers offer onions at reduced prices, ranging from USD 0.19 to 0.34/kg, which is, on average, 13% YoY cheaper. The increased supply is driven partly by the sale of substandard onions that are unsuitable for long-term storage, with low demand for these products mostly from chains and resellers. Overall, Ukrainian onions are now 20% cheaper than in the same period in 2023.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W46 2023 to W46 2024)

India

India’s onion prices decreased by 1.89% week-on-week (WoW) to USD 0.52/kg in W46 from USD 0.53/kg in W45. This decline is due to the arrival of the fresh Kharif crop, alongside a price reduction over the past month following the government’s subsidized sale of onions in key consuming centers. The government is selling buffer stock onions at a subsidized rate in Delhi and other cities to alleviate high prices. The government holds a buffer stock of 450 thousand mt of onions, of which 150 thousand mt have already been transported. The buffer stock onions are being transported to key consuming centers via railways for the first time, helping boost supplies. However, onion prices increased by 30% month-on-month (MoM) and 23.81% YoY. According to Consumer Price Index (CPI) data, retail inflation rose to 6.21% in Nov-24, with food inflation hitting a year-high of 10.87%.

Netherlands

In W46, onion prices in the Netherlands increased 6.67% WoW and 23.08% MoM to USD 0.16/kg. 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, contrasting 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 W46, Mexico's wholesale onion prices slightly declined by 1.42% WoW to USD 1.39/kg. This WoW decrease is due to short-term market adjustments and fluctuations in supply and demand. However, prices surged significantly by 113.85% MoM and 71.60% YoY, driven by seasonal supply shortages, adverse weather, rising production costs, and strong export demand. The typical seasonal gap between harvests in October and November limited onion availability as inventories tightened, contributing to the sharp MoM increase. Recent droughts and heavy rains in key producing regions, such as Sinaloa and the Bajío area, negatively impacted yields and quality, further constraining supply. Additionally, rising production costs, including fertilizers, fuel, and labor, have driven up the price of onion production. The strong export demand from the US, where Mexico is a crucial onion supplier, has added further pressure on the domestic market, resulting in a significant YoY price increase.

Egypt

Egypt's wholesale onion prices increased 6.25% WoW to USD 0.34/kg in W46. The price increase is due to seasonal supply and demand shifts and higher domestic consumption as the local market prepares for a short-term supply gap. Despite a significant rise forecasted in Egypt's overall onion production in 2024, up by 1 million metric tons (mmt), the timing of harvests and supply chain fluctuations may have caused a temporary tightening in available stock for the wholesale market, contributing to the short-term price increase.

Spain

In Spain, wholesale onion prices increased by 8.70% WoW and 19.05% MoM to USD 0.23/kg, driven by severe flooding in critical agricultural areas like Valencia. The intensecold dropphenomenon caused torrential rains and flash floods, damaging infrastructure, disrupting transportation, and reducing local onion supplies. However, prices are down 39.02% YoY due to a 20% increase in sown area and higher yields compared to last season, resulting in oversupply. Spanish onions face limited demand from European markets already stocked with domestic produce. Since July 2024, Spain’s expanded production has outpaced demand, with export opportunities restricted by abundant European onion supplies, except in France, where disease has reduced yields.

3. Actionable Recommendations

Adopt Weather-Resilient Agricultural Practices

Farmers in Nigeria and Mexico should invest in weather-resilient agricultural practices to protect their onion crops. Adopting drought-resistant onion varieties, such as Pusa Red, a variety known for its resistance to heat and drought, or California Yellow, which performs well in dry conditions, coupled with advanced irrigation systems such as drip irrigation, can help ensure consistent water supply even during irregular rainfall or drought periods. These practices would allow farmers to mitigate the adverse effects of excessive rainfall, waterlogging, or water shortages, which have historically disrupted planting and harvest cycles. By improving water management and crop resilience, farmers can increase their yield stability and protect against the risks of erratic weather, ultimately leading to more predictable onion production and market stability.

Diversify Export Markets

Given the challenges in significant markets such as the US and China, onion-producing countries like Peru, Mexico, and India should focus on diversifying their export markets. This includes establishing trade agreements with emerging markets in Southeast Asia, the Middle East, and parts of Africa, where demand for onions is growing. These countries can reduce their reliance on a few critical markets by improving logistics infrastructure and building stronger trade relationships. Diversifying export destinations will help cushion the impact of potential demand fluctuations from their traditional customers. This strategy ensures that onion producers are less exposed to market volatility and can maintain a consistent revenue stream by reaching a broader base of international consumers.

Invest in Post-Harvest Technology and Infrastructure

Nigeria and India should prioritize investments in post-harvest technologies and infrastructure to address the significant issue of post-harvest losses. With rising inflation and unpredictable weather conditions, farmers in both countries need help preserving their onion harvests. The construction of modern storage facilities, including cold chain systems, would reduce spoilage during excess production periods and improve the overall shelf life of onions. By enhancing storage capabilities, farmers could hold onto their produce during off-peak seasons, leading to a more balanced market and less pressure on prices during peak harvest times. This could also alleviate the pressure of price fluctuations and improve the stability of the onion supply, ultimately benefiting both consumers and farmers.

Sources: Agrifocus Africa, The Print, Agraria, Agrobusiness