June 9 2006, 14:53

Onion price beats records

Buyers and sellers noted a long time ago that onion price reaches its peak in June; this season has met the expectations again.

Today an average wholesale price for onion has grown up to $0.88 on wholesale bases. Small shipments are sold for the price up to $1.07/kg. This price is a maximum level for the recent years.

There is a rather large quantity of imported onion on market. Onion is supplied from Holland, Azerbaijan, Poland and other countries.

Unlike other "borsch" vegetables, which price either jumps up or drops down lower the production cost level, onion has being characterized for relatively stable and forecasted prices in recent years. The experts mentioned the possibility of some overproduction for onion this year. Despite of this forecast, increased demand and reduced import played their roles, so that mentioned trend had been observed for one more time. In June 2004 an average onion price was $0.52/kg, in August 2004 - May 2005 the price was about $0.19-0.23/kg; in June 2005 the price jumped up to $0.58/kg. In the beginning of season 2005/2006 onion price decreased again down to $0.23-0.25/kg, grew up to $0.39-0.45/kg in the first half of 2006. By June 2006 onion price has grown twice as high.

Will such situation repeat in 2006/2007 season? Is it any sense to allocate extra premises to store onion? The Agricultural Marketing Project forecasts that onion harvest will be 18-25% higher than a year ago, if weather favors. If gross onion production increases, the price for this commodity can remain rather low in season. But, it is the question if the producers are able to provide extra storage area for onion. This season carrot, potato and even red beets will probably stand the competition with onion for place in storage. We can say that onion price will reach its maximum in June next season. But no one can guarantee that the price beats the record of this year or at least reaches this level.