January 10 2006, 12:19 Agrarian Marketing Project

Excessive Onion Supply Could Result In a Price Decrease Soon

We already informed readers that onion producers and storage companies worry about excessive onion reserves accumulated in storage. Onion supply now exceeds demand in the wholesale market. Vendors are now having a hard time selling large onion sets of good quality, so they are starting to reconsider prices. At the moment, onion reserves are well stored and there is no panic in market, so vendors are managing to keep the price at its current level. The jump in demand during the holidays was not enough to increase onion price even for a short amount of time. Therefore, we can state with certainty the threat of an overstock of onions does exist.

This year onion prices are much higher than a year ago. In the beginning of 2005 wholesale onion prices fluctuated between $ 0.15-0.19/kg; today onions are sold at between $ 0.31-0.35/kg. According to estimates from the Agricultural Marketing Project, onion production in 2005 increased 6% when compared to the previous year mainly due to an increase in yields. In addition, onion quality was also much better.