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Onion market participants are expecting steep price increase

Participants in the onion market are firmly convinced that the onion prices will increase by April 2024 rather steeply.

The EastFruit team conducted a survey on the hottest topic for the region’s fruit and vegetable market in its Telegram channel. We asked subscribers how they see the prospects for onion pricing by early April 2024 compared to today. The survey results were somewhat unexpected – the vast majority of market participants, namely 65%, believe that onion prices will increase, with 19% expecting onion prices to more than double after storage.

Here’s how survey participants’ responses were distributed.

Only 25% of those who took part in the survey, i.e. every fourth person expect onion prices to decrease by April. And this is not surprising, because a decrease in onion prices after storage occurs quite rarely our region, and in many countries this has never happened before. In addition, many market participants reacted to the news about onion export restrictions imposed by India, although this does not in any way affect the market in our region, and Indian onions are predominantly non-yellow type as in the Eastern Europe and Central Asia.

However, there are also real news that may influence market participants’ expectations regarding further increases in onion prices, namely: rumors about declining yields and poor quality of onions in EU countries, a ban on onion exports from Egypt until the end of 2023, and a continuing ban on onion exports from Turkey.

However, other facts cannot be ignored, such as: record areas under onions in many countries of the world, including literally every country in our region. Also, currently a widespread phenomenon is the purchase of onions for storage in rented premises by people who have never traded onions before and have never grown onions. They basically know nothing about onions except what they know as consumers. This often happens in years that follow a year of high onion prices and leads to excess demand during the harvest period and excess supply of onions in the market after storage.

We described the situation on the onion market in detail in the material “Onion market dilemma”. By the way, in that article we showed that participants of another our survey admitted that they mostly plan to store onions until spring.

If we digitize our survey, it turns out that several hundred of its participants came to a forecast for a 30% increase in the price of onions by April 1, 2024 compared to today. For Uzbekistan, this means that wholesale price of onions will be close to 24 US cents per kg, in Tajikistan – 20 cents, in Moldova – 33 cents, in Ukraine – 35 cents and in Georgia – 39 cents per kg.

Only time will tell whether market participants are right. And the price situation now looks like on the following chart.

EastFruit

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