November 28 2006, 14:27

Excessive supply of onion resulted in price decline

According to information provided by the specialists of "Agrooglyad: Vegetables and Fruits" journal, onion producers have been decreasing onion prices since the beginning of this week. To the specialists' opinion, the ongoing decline of onion prices can be explained by several factors. The main reason for excessive supplies is a good onion harvest this season, especially in southern and central oblasts. But, the market players mention that large volumes of onion in storages are of medium quality, they need to be sold soon. Otherwise the producers will simply lose a part of the harvested products. The market players mention the other reason - a low demand for onion has been formed after the finished purchases by vegetable storages.

The specialists of "Agrooglyad: Vegetables and Fruits" journal mentioned that during the harvesting period large shipments of onion were exported out of the country, to Poland in particular. At the present moment onion is sold for up to $0.49-0.52/kg on Polish markets; this price is almost thrice as large comparing to the prices on Ukrainian market.

The representatives of wholesale companies in the western oblasts informed that they were able to purchase onion for $0.15-0.19/kg. At the same time, in the end of past week the minimal prices for onion were not lower than $0.19-0.23/kg, and somewhere $0.23-0.29/kg depending on the product quality. Guided by the low demand, the specialists have forecasted the further price decrease around 10% for medium quality onion.

Some producers have loaded good quality onion to their storages; they do not intend to sell products right now. These producers are waiting for better prices. To the opinion of some market players, the affordable prices for onion producers can be formed not sooner than in spring 2007. At that moment the quantity of quality onion supplies from the storages will be the main price forming factor.