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The surface cultivated with onion might be reduced in Ukraine

The surface cultivated with onion in Ukraine, according to EastFruit analysts, may decrease in 2021 due to their critically low prices since last summer.

The average prices for onion on the Ukrainian market continue to vary within the range of $0.10-0.11/kg since the end of July 2020 and it reached $0.13/kg only for few weeks in August last year. Thus, Ukraine continues to record the lowest prices for onion in the Eastern Europe region.

For instance, onions are sold on average at $0.15/kg in Moldova, and at $0.22/kg and $0.26/kg in Poland and Georgia, respectively. Meanwhile, in Russia, where farmers are disappointed with the current onion season, prices for local onions are $0.16-0.22/kg. In Belarus, they are traded at an average level of $0.26/kg, due to increased supplies from Ukraine in the second half of the season among other reasons.

It should be noted that in the current season Ukraine has a potential to export a record volume of onions in the last five marketing years (July-June). Ukrainian exporters have already set an export record in the first half of the season, and this trend only strengthened in January. As of January 2021, the country exported 14 thousand tons of onions, while previously the highest export for the entire marketing year was 18.9 thousand tons in the 2019/2020 season.

Nevertheless, the growth in exports has not yet positively impacted the prices, and they remain extremely low in Ukraine. Moreover, according to the APK-Inform: Vegetables and Fruits project, the storage facilities of Ukrainian farms may have the largest volume of last year’s onions in the last three seasons during market preparation for the new season. The quality of such stocks is considered rather low by farmers, but they still keep onions in storage, hoping that prices increase by the end of spring.

Such negative trends are already affecting farmers’ plans regarding areas cultivated with onions, especially their early varieties that might decrease significantly in some regions.

According to EastFruit analysts, the situation on the Ukrainian onion market in late spring – early summer 2021 will depend on several factors.

First, the stocks of last year’s onions and the activity of exporters will be an important factor. On one hand, Ukraine has a potential to export a record volume of onions this season. On the other hand, the quality of stocks is a matter of concern in many cases, and importers from Belarus can switch to imports from Central Asia in 1-2 weeks, following the example of their Russian counterparts.

Secondly, much will depend on when the new season starts and on the quality of winter onions and early varieties. The imports of onion sets in 2020 in Ukraine was close to a record, which means that the harvest of such onions may be as big as it was last year.

In the meantime, due to bad weather conditions, many growers are having difficulties with the early onion varieties, which will postpone the start of the season. This may cause raising prices for last year’s harvest, but this will also depend on the quality of stocks and the final harvest of winter onions.

We believe it is still too early to make projections regarding late onion for storage, although according to preliminary data from the APK-Inform: Vegetables and Fruits project, there may be negative results. Nevertheless, one should not ignore the fact that farmers can drastically change their plans during the season, so the final result on the surface cultivated with onion in 2021 will be observed in the end of this summer.

EastFruit

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