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Onion sales and pricing in China experienced favorable conditions before the Chinese New Year. However, urgent orders from the Philippines during the holiday led to an early resumption of production by onion processing factories, driving prices above pre-holiday levels. In late Dec-24, the entry of the new Indian onion season caused a 10 to 15% price drop for Chinese onions, though the decline was less severe than in previous years. Despite lower prices from Oct-24 to Dec-24 compared to 2023, the overall annual supply period maintained relatively strong price levels. After the Chinese New Year, red onion stocks were depleted due to these urgent orders, while yellow onion supply remained ample. New onions from Yunnan have entered the market, with prices slightly higher than last year, and demand focused on domestic sales. The market is in its off-season for exports, with price fluctuations largely depending on the Indian onion market.
Indian farmers and onion exporters are urging the government to remove the export duty on onions as production is set to rise by 57% year-on-year (YoY). Favorable rainfall in Nashik and an expanded cultivation area of 535,000 hectares (ha) are expected to yield 10.60 million metric tons (mmt) in the Rabi season. Concerns over falling prices have led industry leaders to call for export incentives to support farmers. Exporters warn that India risks losing market share to Pakistan, which has gained ground in key markets. With limited storage capacity, stakeholders stress the need for policy adjustments to stabilize prices and maintain export competitiveness.
The Spanish garlic and onion sector is experiencing significant changes. Onion production has decreased by 14.9% YoY, leading to a price drop to USD 0.45 per kilogram (EUR 0.43/kg), the lowest in three years, due to an oversupply exceeding demand. In contrast, garlic production has risen by 37.5% YoY, resulting in a 21.6% YoY price increase, reaching USD 3.45/kg (EUR 3.32/kg). This price hike is due to high production costs and reduced planting due to profitability concerns. Despite a 13.1% YoY decrease in turnover compared to 2023, the sector's total revenue in 2024 exceeded USD 49.92 million (EUR 48 million), showing a positive trend. The onion and garlic sectors are optimistic about growth in 2025, driven by sustainable practices and technological innovations.
The Philippine government has launched an inspection of onion warehouses amid concerns that newly harvested supplies are being withheld from the market. The Agriculture Secretary directed the Bureau of Plant Industry (BPI) to investigate potential hoarding, which he described as price manipulation. The BPI's inspection is expected to conclude in W9. Despite the authorized importation of 4,000 mt of onions to address supply concerns, prices remain high, with red onions reaching up to USD 4.13/kg (PHP 240/kg). The early harvest was projected to add significant supply, with around 33,000 mt expected by Mar-25.
The Northwest United States (US) onion production value increased in 2024, driven by improved growing conditions in Southeast Oregon and Southwest Idaho. Idaho’s utilized production value rose 25% to nearly USD 205 million, Oregon’s increased 10% to USD 260 million, and Washington's grew 7% to USD 477 million, with the three states accounting for 58% of national utilized production. Harvested acreage expanded in Idaho and Oregon but slightly declined in Washington. Despite higher production and shipments, onion prices have fallen below production costs due to increased supply and competition from Mexican onions. Marketable volume remains strong, though growers hope for a price recovery.
India's onion prices decreased to USD 0.25/kg in W8, marking a 3.85% week-on-week (WoW) decrease and a 19.05% YoY increase from USD 0.21/kg. Onion prices at the Lasalgaon Agricultural Produce Market Committee (APMC) dropped from USD 35.50/quintal (INR 3,100/quintal) to USD 30.92/quintal (INR 2,700/quintal) due to a rise in supply. The supply increase came from a daily auction of around 21,000 quintals, including 537 quintals of summer onions, which began arriving in small quantities. The onions currently in the market are late Kharif produce, with a shelf life of less than a month. Farmers are selling at prevailing prices, while summer onions, with a longer shelf life, are being stored, raising expectations of a bumper summer onion crop.
In W8, the Netherlands' onion prices remained steady at USD 0.14/kg, maintaining the same level for the second consecutive week. However, this represents a significant 64.10% YoY decrease from USD 0.39/kg. The price decline can be attributed to weak export demand, especially from the Far East and the Caribbean, compounded by global trade uncertainties and reduced purchasing activity from key buyers. While Dutch onions continue to be competitive in various markets due to their lower price, the increased supply from the new season has exerted additional downward pressure. Despite the market downturn, organic onion prices remain high, and shortages of red onions persist due to poor yields. While current price stability offers some relief, weak export demand and increased supply may limit significant recovery in the short term. Red onion shortages could drive localized price increases, while organic onions may experience more stable prices due to sustained demand.
Mexico's onion prices decreased to USD 0.47/kg in W8, a 9.62% WoW decline and a 76.50% YoY drop. The price drop in Sinaloa has severely impacted producers, with prices in some areas falling to just USD 0.20/kg (MXN 4/kg), well below the production cost. This is attributed to factors such as increased competition from other regions like Guanajuato, and early planting due to water scarcity, which has led to oversupply. While premium onions are still fetching a price, medium and small varieties remain unsold. This market volatility could continue to pressure prices, limiting recovery until demand stabilizes and supply dynamics improve.
In W8, Egypt’s onion prices fell to USD 0.19/kg, marking a 5% WoW decline and a 66.67% YoY drop from USD 0.57/kg. This decrease is primarily due to strong local supply driven by favorable weather conditions in key regions such as the Nile Delta and Upper Egypt, as well as oversupply resulting from last season’s global shortage, which led farmers to expand acreage. While the coming season's harvest is expected to match last year’s 3 mmt, local demand remains steady at around 1.2 mmt, suggesting a high supply and continued pressure on prices. Export demand, particularly from Europe and Africa, is likely to rise, but price fluctuations are expected to be minimal in the short term. Stable yields, especially in yellow onions, are expected to maintain supply levels and contribute to price stability moving forward.
To stabilize supply and mitigate price volatility, countries like the Philippines and the US should invest in cold storage facilities to better manage onion stocks. This would prevent the adverse effects of oversupply and hoarding, helping to regulate market prices and ensure a more consistent supply throughout the year.
In regions facing oversupply, such as Spain and Mexico, investing in onion processing such as dehydration into flakes, powder, or paste can create alternative revenue streams. This would help manage excess production and reduce waste, providing an opportunity to maintain profitability even during price declines.
Onion producers in countries like the Netherlands, Mexico, and Egypt should explore new export markets, particularly in regions such as Africa and the Middle East, to counterbalance weak demand from traditional buyers. Strengthening trade agreements and utilizing digital platforms could expand market reach and improve stability in global pricing.
Sources: Tridge, Fresh Plaza, Capital Press, Vinetur, The Times Of India, Luz Noticias
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