Information for fruit and vegetables business in CIS
Will the price on onion grow next season?
"Will the price on bulb onion increase this season?" - This question intrigues all producers, and nobody is able to answer it unambiguously. The majority of the onion producers point out that the average yield decreased comparing to the previous year - and it is confirmed by the producers of Odesa and some other oblasts where the main onion acreage is concentrated. Basing on this information, the producers and purchasers are waiting for the price growth on this commodity after the end of harvesting time.
At the same time, the decrease on onion yield does not mean production decrease, as the onion acreage was extended this year significantly. According to the recent data of the Agricultural Marketing Project, the acreage of bulb onion grew 12-15% comparing to the previous year and was a top record for the recent years. Moreover, the yield will possibly be higher than it was prognosed before, and will increase 24% the average long-term data. So the analysts of the Agricultural Marketing Project forecast the increase 6% of onion production comparing to 2004 that will be a top record for the recent years.
The supply is a more or less understandable thing, but it is really hard to speak on a demand level. The thing is that past year the channels of onion contraband supply from Poland and some other countries were blocked. A flare of interest to onion production was observed in the West of Ukraine, and the price has grown throughout the country, despite of the considerable production growth. It is very important to understand what kind of import regime will be this season in Ukraine, and also how the newly harvested onion will be sold. Past year one of the reasons of the price jump in the second half of the season was the considerable loss of onion during the storage period.
Some market players mention the newly harvested onion is of medium to bad quality and will probably be poorly stored. Those producers who were able to grow marketable onion are sure that the price will increase, and plan to store maximum volumes. The wholesale companies keep eyes on the ball, and plan to import onion from Moldova in case of the deficit of the national product. Still, at this moment the newly harvested onion is obvious to be stored better than the commodities of 2004 harvest.
At the present moment the wholesale onion price from the producer is fluctuating within USD 0.14-0.2/kg. At the same time, the marketable onion suitable for storage is sold now on USD 0.24-0.26/kg. We'll remind that past year the price on onion in September was USD 0.12-0.16/kg, and grew up to USD 0.26-0.28/kg by May 2005.
You will have an opportunity to study the perspectives of onion production and prices during the second international conference "Fruits and Vegetables of Ukraine 2005" to be held in Kyiv on December 5th-7th 2005. There will also be information presented about the storage and PHH technologies for value adding purposes, and also about the most effective onion production technologies.