According to EastFruit analysts, onion prices in the European Union continue to rise. At the same time, a number of reasons have recently emerged for maintaining high prices longer than previously expected. Therefore, we decided to list these reasons in this brief onion market review.
Red Sea and the Houthis
How does this impact the onion prices in Europe? Europe imports significant volumes of off-season onions, especially in years with high prices like this one, from New Zealand. However, due to the fact that the actual passage through the Red Sea is blocked by Houthi terrorist attacks on civilian ships, onions have to go around Africa. This extends the route by 12-17 days and increases its cost, which also impacts the price of already expensive onions from this remote country.
There is a similar problem with the supply of onions from other Asian countries. In particular, India and China supply onions to the region via the same sea route.
Egypt and new its onion export bans
Egypt has again extended its ban on onion exports. Despite the fact that the country is on the verge of default due to an acute shortage of foreign currency, and the real exchange rate of the local pound is already more than twice the official rate, the country is voluntarily abandoning one of the main sources of export revenues. At the same time, Egypt is the largest supplier of onions to EU countries. Accordingly, this factor has a huge impact on the market and supports further price increase.
Problems with onion quality in Central Asia and logistical difficulties
The countries of Central Asia, primarily Uzbekistan and Kazakhstan, have large stocks of onions, and they onions there are very cheap. Moreover, they have large sizes, which are in short supply in the EU. But there is also the other side of the coin – recently there have been many reports about the beginning of onion germination in storage facilities without climate control, which creates great risks for importers in the EU.
Read also: Onions may freeze – severe frosts are coming to Uzbekistan, Kazakhstan, and Tajikistan
Another problem are the snowfalls and icy roads due to deteriorating weather conditions in Kazakhstan and Uzbekistan in recent days, which negatively affects the speed of product delivery and further increases risks.
Ban on export of onions from Tajikistan
This is, of course, not the most important factor, but it is worth considering. Tajikistan has unofficially banned the export of onions, although it could make good money from it. And for the EU, this onion would not be superfluous, especially since there is a lot of it there and it costs only about 9 US cents per kg in bulk.
Conclusions
The first batches of onions from the southern regions of Spain will hit the market by mid-April 2024. Obviously, these onions will also be expensive, because prices in Spain are currently high and onion supplies are at an all-time low. Onion prices are also high in Italy, where the first harvest will also be only in mid-April.
Thus, most likely, we should not expect serious changes in the situation on the EU onion market until mid-May 2024. This means that onion prices may well exceed last year’s levels and set new records.
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