HomeNewsOnion prices in Ukraine have updated their historical records – will they keep rising?
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Onion prices in Ukraine have updated their historical records – will they keep rising?

In January 2023, EastFruit analysts warned that wholesale prices for this product would reach at least $1 per kg, and considered scenarios in which prices could even be significantly higher.

Over the past three weeks, wholesale prices for onions in Ukraine have resumed their rapid growth and by Friday May 26, 2023 have reached an absolute historical record both in local currency and in US dollars: UAH 48 and US $1.31, respectively.

The previous record for the wholesale price of onions for Ukraine was set on May 5, 2019, and amounted to UAH 33/kg or US $1.15, respectively, at the exchange rate for that day.

It is interesting to note that currently in the countries of Central Asia, primarily in Tajikistan, the problem is the opposite – an oversupply of onions. There, you can already buy onions of a new crop even at 0.18 US dollars per kg, i.e. 7 times cheaper than in Ukraine!

Why, then, does Ukraine not import onions from Tajikistan and should we expect stabilization or even a decrease in wholesale and retail prices for onions in Ukraine in the near future? With these questions, we turned to Evgen Kuzin, an expert at the independent analytical company Fruit-Inform.

“Presently there are practically no locally grown onions left on the market of in Ukraine. EU imports of 2022 are offered at $1.20-1.40/kg and prices have risen this week. In the EU itself prices for last year’s onions are also growing. For example, in Poland wholesale prices of onions have grown this week and reached $0.85-1.04/kg,” Evgen Kuzin says.

“At the same time, there are also new crop onions on the Ukrainian market, which are offered at much lower price. Egyptian onions can now be bought for as little as US $0.90/kg. However, the demand for these onions is not as high as for last year’s crop produce. In my opinion, price reduction can be expected when higher-quality early onions enter the market en masse. As of now, early onions from Egypt and Central Asian countries are not “dressed” enough, which is considered a sign of insufficient quality in Ukraine. Such onions have shorter shelf life and traders prefer to work with more expensive onions from the 2022 harvest, where the risks of losses are lower,” says Fruit-Inform’s expert.

His information is supported by another experienced expert.

“Ukraine has already received shipments of onions from the countries of Central Asia, namely from Kyrgyzstan, Kazakhstan and Uzbekistan in May. So far, there have been no deliveries from Tajikistan. Traders also actively imported onions from Azerbaijan. Perhaps in the near future, the first batches of early onions will arrive from Turkey, from where the logistics are much less expensive,” says Fedir Rybalko, FAO international consultant.

He points out to another important market aspect, which has gotten worse since the Russian invasion into Ukraine.

“Difficulties with the onion imports from Central Asia are associated with expensive and complex logistics and insufficient quality. For example, onions from Uzbekistan need to be transported through Poland, and the cost of transportation is at least 33-35 US cents per kg. Delivery from Tajikistan will cost even more. And from Turkey, import costs are only about 15 cents per kg, but prices there are significantly higher than in Central Asia, and early onion harvesting is just beginning,” says Fedir Rybalko.

Before the Russian war, logistics where much faster and cost a lot less. Basically, the farmers in Central Asia and Turkey are paying the price for the war Russia started against Ukraine and logistical costs are deducted from the price they receive.

“We expect that the increased supply of better quality onions from the countries of Central Asia and Turkey will stabilize the situation over the next 10 days,” Evgen Kuzin predicts.

“I would not expect wholesale prices for onions in Ukraine to decline starting around June 15, when early onions will be harvested in the southern regions of Ukraine in Moldova,” Fedir Rybalko says.

Thus, according to experts, for at least three more weeks, Ukrainian consumers will have to bear the record high costs purchasing the onions.

The main reason for these additional financial losses of Ukrainian consumers is Russia, which, having invaded the southern regions of the country, almost completely destroyed one of the largest onion clusters in Europe where growing, storing and post harvest handling of onions was concentrated. This region, which is still presently occupied by Russians, was also producing significant volumes of early onions and its development took many years, yet, it was destroyed in less than a year by Russian aggressors.

EastFruit

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