EastFruit analysts draw attention to yet another incredible turn in onion price drama in the Philippines. Let us recall that last season prices for onions in this country reached ridiculous levels, exceeding the prices for meat. Onion price per kg was also higher than the country’s monthly subsistence level, making the vegetable unaffordable for a large portion of the Philippine population.
This led to many funny situations when furniture stores began to accept onions as payment, or when it became fashionable to give bouquets of onions at weddings, or when passenger airline pilots were arrested for trying to bring onions into the country.
Of course, these problems could have been avoided if the country’s authorities had simply stopped interfering with the market and let it take care of balancing supply and demand. However, obviously last year’s situation did not teach them anything, because the highest level of regulation of the food market remains, and the country again made headlines in the global press with information about onion prices.
Read also: Onion prices in Poland record high for this period of year!
Now the situation is the opposite – onion prices are so low that farmers are reporting losses. In particular, in Luzon, the main onion production region, the wholesale price for onions fell to 36 US cents per kg, which is approximately 28-30 times less than a year earlier. At the same time, if last season, for some reason, the government was slow to issue permits for the import of onions, then this season, when local onion production increased sharply, it decided to issue more permits than needed for domestic consumption. This, naturally, led to a collapse in prices. And the new onions in the Philippines will begin to be harvested in February 2024.
This is a good example of how government intervention in the market always leads to negative consequences for everyone: for consumers, for farmers, and for the state itself.
