According to EastFruit estimates, Egypt was the main supplier of yellow onions to the markets of Eastern Europe and the European Union in the first 4-5 months of 2023. Egyptian onion producers are very pleased with the season, which is ending soon in Egypt, as they have managed to make very good money this year due to the high demand for their golden onions. Moreover, due to such a high demand, even quality claims were received much less frequently than usual, since importers also made good money on trading the onions from Egypt.
However, domestically, millions of people are extremely dissatisfied with the price situation and quality of onions, and they say that low-income citizens cannot afford to buy this vegetable, while it is indispensable for cooking local dishes. In fact, the factor of the local currency devaluation was added to the factor of the wholesale prices increase due to the rise in exports. The Egyptian pound nearly halved in value in a year, and the dollar-denominated wholesale export price of onions more than doubled as well. As a result, the price of onions in the domestic market paid by local consumers increased by four or more times.
The problems faced by consumers in Egypt do not end here – the increase in prices for golden onions was accompanied by a deterioration in its quality. Onion farmers and exporters tried to sell all quality products for exports as export prices were more attractive than local. Also, unsure of future exchange rates, traders preferred to hold foreign currency reserves over getting risky Egyptian pounds. Therefore, the local market mainly received onions of lower quality, which were not exportable and suitable for long-term storage and transportation.
However, local farmers pay attention to another aspect of the problem – they import almost all the inputs for growing onions: seeds, fertilizers, plant protection products, etc.. All these inputs have risen in price due to the devaluation of the Egyptian pound. Therefore, the increase in prices will allow farmers to maintain sustainability of the business and assure that prices of onions normalize in the next production cycle. It does not mean at all that their profits have increased nearly as much as the onion prices.
The main markets for onions for Egypt have traditionally been the countries of the Middle East: Saudi Arabia, the United Arab Emirates, Oman, Kuwait, and Syria, as well as the UK and Russia. However, this year Ukraine, Poland and other EU countries have joined them. Moreover, demand for onions from Central Asian countries such as Uzbekistan, Kazakhstan, Kyrgyzstan, Turkmenistan, Pakistan and Tajikistan was observed for the first time. These countries were previously competitors of Egypt, and at the beginning of 2023 suddenly became importers. Accordingly, the rise in prices was due to the realities of the market, as the demand for Egyptian onions from the countries of the Middle East and the UK also remained traditionally high.
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