November 9 2006, 09:53

Ukraine is becoming a large onion supplier on EU market

Ukraine was traditionally considered to be net importer of onion. In 2006 our country will become a large exporter of this commodity for the first time of the history. It is interesting to mention that the EU countries are likely to become the main sales market for Ukrainian onion in 2006.

The largest volumes of onion export for the recent five years have been recorded in 2004 when 380 tons of this commodity were delivered abroad (mostly to Estonia). Then, a significant decline of Ukrainian onion export volumes was observed on the background of increasing import. The negative balance of the external onion trade fluctuated within the limits 1,000 to 2,300 tons. In addition to Estonia, the insignificant volumes of onion were also supplied to Belarus, Russia and Georgia.

The export accounted for less than 1% of the gross national onion production; Ukraine annually harvests around 600,000 tons of onion. In 2006, according to evaluations of the Agricultural Marketing Project, the country will produce 870,000 tons of onion. It is a top record for onion production in the history of independent Ukraine.

The price balance changed much due to record onion production in Ukraine and poor onion harvest in Western Ukraine. Now the prices let Ukrainian onion be supplied even to Poland which was traditionally considered to be the EU country with the lowest prices for onion. Some Polish experts criticized Ukraine for the utilization of too expensive production technologies (our producers apply drip irrigation; Polish onion is a rain fed crop). But, exactly this factor helped Ukraine get a good harvest of quality onion in 2006.

We have not obtained yet the official statistical data about the export done this fall. Still, at once several companies informed us about export supplies of 200 and more tons of onion each to Poland, Germany, Austria and other EU countries. Thus, the Agricultural Marketing Project forecasts that the summarized volume of onion export in 2006 will exceed two thousand tons. It could exceed import data first time for several recent years.

Ukrainian companies do not experience major problems while exporting onion to the EU; the tariff rates for Ukrainian onion are only 6.1%. The experts point out that the situation will positively influence Ukrainian onion market. First of all, the partnership with the importers in the EU countries will be adjusted. Second, the inner market will be off-loaded so that onion producers could avoid losses. And, the extended sales channels provide the possibility to increase onion production in long-term perspective. It would be problematic to build up onion production if this crop is sold only on the inner market.

You can learn the exporting perspectives for Ukrainian produce in 2007, as well as strategic perspectives during the third international conference "Fruits and Vegetables of Ukraine 2006. Open Market". The largest Ukrainian vegetable exporters (onion exporters in particular) will participate in the event. Also, at once several large importers of produce commodities will come from the EU countries.