1. Weekly News

Brazil

Brazil's Growing Onion Industry Drives Record Production and Innovation

Brazil's onion market has grown impressively in recent years, making the country one of the largest onion producers in Latin America. In 2023, national onion production exceeded 1.6 million metric tons (mmt), according to the Brazilian Institute of Geography and Statistics (IBGE). Onion cultivation is primarily concentrated in the south, northeast, and central-west regions, with Santa Catarina as the top producer, followed by Bahia and Minas Gerais. Brazil has increasingly adopted hybrid onion cultivars to meet the rising demand and diverse climate conditions. These hybrid varieties offer several advantages over traditional ones, including better resistance to pests, diseases, and climate variations. They also allow for higher planting density, resulting in significantly greater yields. In some regions, hybrid onions can yield over 100 metric tons (mt) per hectare (ha), compared to the 30 mt/ha typically produced by conventional varieties.

Ghana

Ghana's USD 2M Weekly Onion Imports Highlight Food Security Challenge

Ghana imports 70% of its onions, amounting to approximately USD 2 million in weekly expenditure, according to Peasant Farmers Association of Ghana (PFAG) data. A significant portion of these onion imports comes from Sahelian countries like Niger and Mali. Despite being self-sufficient in key agricultural products such as cassava, maize, peanuts, cabbage, millet, yam, and plantain, Ghana remains heavily dependent on imports for crucial food staples, including onions. This reliance on imports for certain crops highlights the country's ongoing challenges in achieving complete food self-sufficiency.

Netherlands

Dutch Onion Exports Rise 12.5% YoY in 2024

By W46, Dutch onion exports had reached 542 thousand mt, marking an increase of approximately 60 thousand mt or 12.5% year-on-year (YoY). Notably, 101,420 mt were shipped to Senegal, maintaining sales levels similar to the previous year despite the later border opening. Ivory Coast, which had previously driven exports before Senegal reopened, has continued to be a key market, importing between 5 thousand mt and 7 thousand mt of onions weekly. Total exports to Ivory Coast have risen to 91 thousand mt in 2024, nearly 30 thousand mt more than the previous year. This increase is primarily due to more competitive pricing, as Dutch onions were too expensive for Ivory Coast in 2023.

Ukraine

Ukrainian Onion Prices Drop Due to Decreased Demand

Due to decreased demand, Ukrainian wholesale onion prices dropped recently following a rise. This is mainly due to the increased availability of medium- and low-quality onions. Currently, onion prices range from USD 0.24 to 0.38 per kilogram (kg), 16% week-on-week (WoW) lower. As the weekend approaches, prices are even lower than the previous season. The price reduction is due to lower demand and the rapid deterioration of onion quality in storage. Sellers are forced to lower prices to accelerate sales and reduce stock. Many farmers hesitate to sell at these low prices, as they are significantly lower than in early Dec-23 when onions were selling for about 20% more.

2. Weekly Pricing

Weekly Onion Pricing Important Exporters (USD/kg)

Yearly Change in Onion Pricing Important Exporters (W49 2023 to W49 2024)

India

In W49, onion prices in India dropped significantly to USD 0.40/kg, marking a 16.67% WoW decline, a 23.08% month-on-month (MoM) decrease, and a 6.98% YoY drop. This decline follows the arrival of new onions from end of Nov-24 end, providing some relief. The new Kharif crop onions, particularly from Alwar, Rajasthan, have already begun arriving in Delhi's markets, with further price reductions expected. To help stabilize prices and counteract recent price hikes, the Indian government has been selling onions from its buffer stock at subsidized rates. Over 4,850 mt have been transported by rail to major cities, including Delhi, to improve supply and ease price pressures.

Mexico

In W49, Mexico's onion prices declined significantly by 16.54% WoW, falling to USD 1.06/kg, representing a 23.74% decrease MoM and a 46.46% drop YoY. This sharp decline is due to several factors, primarily the increase in supply from the new harvest, especially from key production regions like Sinaloa, which has led to a market surplus. As the harvest season peaks, the availability of fresh onions has pushed prices down. Moreover, reduced export demand, due in part to competition from other onion-exporting countries like the Netherlands and India, has contributed to a more excellent domestic supply, further putting downward pressure on prices. Seasonal adjustments in domestic consumption, where demand can fluctuate, also prompted sellers to lower prices to avoid excess stock.

Egypt

In W49, Egypt's onion prices surged by 9.68% WoW, rising from USD 0.31/kg in week 48 to USD 0.34/kg. Seasonal shifts in supply and demand primarily drove the price increase in week 49. The arrival of colder weather often leads to higher domestic consumption, as onions are a staple in many Egyptian dishes during winter. Moreover, concerns about a short-term supply gap likely pushed prices up as traders and wholesalers anticipated potential shortages. This seasonal increase in demand, combined with tight supply due to factors like slower harvesting or transportation delays, contributed to the price rise despite the lower prices than the previous year. The YoY price dropped 40.35% from USD 0.57/kg in W49 of 2023. One of the main reasons is the overall increase in domestic onion production, which has led to a more stable and abundant supply compared to last year. Furthermore, the Egyptian government’s efforts to improve market efficiency and reduce export restrictions have helped increase domestic availability, putting downward pressure on prices over the past year.

Spain

In W49, Spain's onion prices fell to USD 0.22/kg, reflecting an 8.33% WoW decrease, a 12% MoM decrease, and a 51.11% YoY drop. The Spanish onion sector is facing an oversupply due to increased acreage and lower prices in previous years, leading to production outpacing demand. While some industries, like Agorreta, are seeing strong demand for high-quality onions, the overall market needs to improve with oversupply, particularly open-ground onions priced as low as USD 0.10/kg. The lack of demand from the industrial sector, including frozen food producers who have already secured supplies, has worsened the situation. However, high-quality onions from regions like Navarre are in strong demand within the EU and non-EU markets. Modernization in sorting and packaging is helping meet this demand, though the market is still adjusting to the supply-demand imbalance.

3. Actionable Recommendations

Develop Strategic Storage and Buffer Stock Systems

India and Ukraine face significant seasonal price volatility, with onion prices fluctuating dramatically during peak harvest periods and rising when supply becomes scarce. Both countries could benefit from developing strategic storage and buffer stock systems to mitigate these fluctuations and ensure a more stable market. Investing in proper storage infrastructure, such as cold storage and controlled atmosphere facilities, would allow onions to be preserved for extended periods and sold gradually throughout the year, reducing supply bottlenecks. Furthermore, establishing buffer stocks similar to India's approach for essential commodities could help stabilize prices during lean months or potential supply shortages. With better storage systems and reserve stocks, both countries can manage market volatility, reduce price shocks, and ensure that onions are available at reasonable prices year-round, benefiting both producers and consumers. Moreover, enhancing market access and distribution networks would enable more efficient movement of onions across regions, ensuring that areas facing shortages can be supplied from surplus zones, further stabilizing the market even during off-seasons.

Strengthen Export Market Diversification

Mexico and Egypt should seek to expand their export base, targeting emerging markets in Asia, Africa, and Latin America, where there is growing demand for affordable, high-quality onions. Mexico can leverage its proximity to the United States (US) and pursue trade agreements with China and Southeast Asia. At the same time, Egypt can focus on East Africa and the Middle East, particularly the Gulf Cooperation Council (GCC) countries. Both nations should actively engage in international trade fairs to forge new partnerships and negotiate favorable trade agreements that reduce tariffs. Moreover, offering competitive pricing, ensuring stringent quality control measures, and establishing efficient logistics for year-round supply are crucial to maintaining a stable flow of exports. By doing so, Mexico and Egypt can diversify their export markets, mitigate risks from relying on a few key buyers, and improve their market share globally, particularly in emerging economies with rising demand for onions.

Improve Market Information Systems

India and Ukraine could enhance their efficiency by establishing better market information systems that provide real-time data on onion supply, demand, and pricing trends. These systems would help farmers, traders, and policymakers make more informed decisions regarding production, storage, and distribution, ultimately leading to better price stability and less waste. Providing timely market data can also enable producers to adjust their output according to demand projections, helping to prevent market oversupply during peak harvest periods and shortages during off-seasons.

Sources: The Bft Online, Portal Do Agronegócio, Nieuwe Oogst