Weekly Product Updates

W6 Onion Update: Global Onion Market Faces Supply Challenges, India Tackles Inflation with Subsidized Onion Release

Fresh Onion
Published Feb 22, 2024
In W6 in the onion landscape, the global onion market faced high prices due to shortages from export bans by major producers like India and Egypt. This prompted European importers to turn to China amidst challenges in maritime transport, creating an opportunity for Peru to capitalize on increased demand. In India, government efforts, including subsidized onion releases and export restrictions, aim to stabilize prices amid rising inflation. Meanwhile, Ukrainian traders are exporting onions to Romania and Moldova amid stable domestic prices, while Central Asian countries work to sell excess onion stocks at reduced prices ahead of the new harvest.

Onion Prices Surge Amid Global Shortages, Peru Seizes Opportunity in European Market

The global onion market recently witnessed high prices due to shortages caused by export bans from producers like India and Egypt, leading to an almost historic situation. European importers, facing reduced domestic production, are turning to China for supply, although challenges in maritime transport hindered shipments. This presents an opportunity for Peru to capitalize on increased demand in Europe, as demonstrated in 2023 when the country's onion exports saw a 2% year-on-year (YoY) growth in value despite a 12% YoY contraction in volume. Spain emerged as a significant importer of Peruvian onions, increasing its purchases by 53% in volume and 91% in value compared to 2022. Despite a purchase decline from other top destinations like the United States US) and Colombia, Peru's onion exports remain strategically positioned to meet global demand amid supply disruptions elsewhere.

Indian Finance Minister's Measures to Address Onion Prices and Retail Inflation

Regarding the increase in retail inflation in India, the Union Finance Minister emphasized that prices of perishable items have decreased and are well within acceptable limits. The government's efforts to address price inflation were outlined, including the subsidized release of onions at USD 0.30 per kilogram (kg) from the buffer stock to address emergencies and stabilize prices, particularly during periods of low supply. Additionally, export restrictions were implemented to mitigate rising onion prices.

Quality Issues Emerge as Brazil Imports Onions from Argentina

From February 5 to 9, the border region of Porto Xavier (RS), Brazil, received a limited volume of imported onions from Argentina. The quality of Argentine onions varied significantly, with many bulbs damaged and not meeting Brazilian market standards. These onions are typically not cured and differ from the usual "14" synthetic ones preferred in Brazil. Importers anticipate improved quality towards the end of the month as better standard onions are expected to arrive. Despite the concentration of the Argentine harvest in March, imports began earlier in 2024 to compensate for the low supply from the Southern harvest and to enhance domestic competition. Consequently, prices for Argentine red onions in Porto Xavier remained steady at USD 16.65/ 20-kg sack, with importers noting initial market inflation.

Ukrainian Onion Exports Surge Amid Stable Domestic Prices

Ukrainian traders are exporting up to 300 metric tons (mt) of fresh onions daily, mainly to Romania. Additionally, Ukrainian onions are re-entering the Moldovan market, where prices have risen for the second consecutive week. Despite these developments, domestic onion prices in Ukraine remain stable at around USD 0.35/kg. Wholesalers and farmers in Ukraine are not hurrying to sell their stored high-quality onions, opting instead to sell products with deteriorating quality. This, coupled with high domestic demand and increasing exports, suggests an onion surplus in Ukraine.

Furthermore, there is an excess of onions in Central Asian countries, where the harvest of new crops begins in just over a month. This surplus has caused onion prices to drop in countries like Tajikistan, reaching as low as USD 0.09/kg. Central Asian countries are working to offload excess onion stocks at reduced prices. Additionally, forecasts indicate that the early onion harvest in these countries will exceed that of the previous year.

By clicking “Accept Cookies,” I agree to provide cookies for statistical and personalized preference purposes. To learn more about our cookies, please read our Privacy Policy.