March 16 2006, 14:20

Ukraine's 2006 onion crop is expected to set another record

Production of onion in Ukraine could be record high for at least the past 10 years in 2006, assuming more or less normal weather conditions. This forecast has been prepared by Ukraine Agricultural Marketing Project (AMP) experts. Analyzing information from onion growers, experts have noted a significant expansion of the planned onion area in most regions of Ukraine. Major expansion is expected in the Steppe climatic zone of Ukraine, which has always been a leader in onion production. Central regions of the country, however, are also expected to grow much more onions.

Past year's onion harvest was close to 763,000 MT, which represented a 6% increase over 2004 and a 46% increase over 2003. Moreover, since 1999, Ukraine's onion production has increased 63%! In 2005 onion production could have increased even sharper, as the total planted area has grown by 14%. However, the hail has damaged large areas of onions in Odesa, which is one of the leading onion growing regions of Ukraine. The dynamic increase in onion production can be attributed to the growing domestic demand and tighter custom control on the border with Poland, which used to be a major source of onion supplies for the Western Ukraine. As a results farmers have been experiencing very high margins on the onion crop in the past few years, which makes them increase production further.

It is also worth mentioning that quality of the onion produced has also gone up significantly. Farmers are very active in adopting new technologies and switching from local varieties of onions to hybrids of foreign selection. Thus, the average yield of onions has increased by 70-80% during the past few years. It is a not very usual thing in Europe but a very large share of onion in Ukraine is grown at the areas with drip irrigation, which assures a very high quality of the produce and very high yields.

Expected increase in Ukraine's onion production can, however have bad backwash for producers. It is not unlikely that total supply of onions in 2006 can exceed the demand. Thus, onion prices in the next season can turn out much lower than most farmers expect. If in 2005/06, according to AMP's estimates, Ukraine's farmers earned around US $120,000 by selling onions their revenue from this crop could drop in 2006/07 season.