January 22 2007, 14:12

Warm weather stimulates the price growth for high quality onion in Russia

According to information provided by the produce market players in Russia, onion is actively sprouting in the storages without the forced ventilation because of the warm weather on the area of the major production and consumption regions of Russian Federation. The experts of "Agrooglyad: Vegetables and Fruits" weekly journal have been frequently receiving such information recently.

Those vendors are seriously worried by the situation who do not have the specialized storages. Despite of the relatively high prices for onion on market the vendors have to reduce the prices for the sprouting onion in order to speed up the sales process. For example, according to the estimation done by the experts of the journal, the prices for medium-quality onion rarely exceed the level of $0.29-0.33/kg on Russian market.

At the same time, the situation remains stable in the segment of high-quality onion. The sales are done in the higher range of $0.55-0.7/kg in this segment mostly due to the stable demand. In the meantime, the specialists observed the consequent reduction of the quality onion volumes on Russian market; that's why the wholesale companies have to worry about the new sales channels right now.

Russian wholesalers admit the possibility that Ukraine is able to become one of the main onion suppliers to the territory of Russian Federation. The wholesale prices for quality onion do not exceed $0.19-0.23/kg. If purchased directly at the farm gate, the prices for a large shipment of this product can be $0.15-0.17/kg. The prices for the same product are about $0.5/kg in Poland. So, the prices for bulb onion are 3.5-4 times as high on Russian and Polish markets than on the market of Ukraine.

According to the evaluations done by the "Agrooglyad: Vegetables and Fruits" journal Ukraine had a record onion harvest in 2006 of about 850-900,000 tons. This harvest is 16% greater than in 2005. Starting from 1999 the onion production has been steadily increasing in Ukraine due to the high profitability of this crop production and the development of the onion growing technologies. The production has increased twofold since that time; the result is onion overproduction in 2006. To the opinion of the analysts of the Agricultural Marketing Project, onion production can decrease 10-13% in Ukraine in 2007.