July 31 2007, 08:47

"Agrooglyad: Vegetables and Fruits" decreases onion production forecast for Ukraine

The analysts of CIS produce business, ""Agrooglyad: Vegetables and Fruits" weekly", have decreased the forecast of bulb onion production on 107,000 tons or 12% comparing to April forecast. Such a dramatic decrease of the production forecast is predetermined by complicated weather conditions, which onion producers had to stand this season in Ukraine.

We'd like to remind that hot wind destroyed a significant part of plantings just after the onion planting campaign in Kherson region; the producers had to replant onions. The onion producers in almost all regions of Ukraine except Polissya were struggling with drought and too high temperature in the process of onion vegetation. As a result, a part of plantings on non-irrigated fields was destroyed, the yielding potential of the remaining plantings deteriorated. Also, practically all market players speak about problems with onion quality this season.

According to the recent forecasts of "Agrooglyad: Vegetables and Fruits", in 2007 onion production will reduce 13% comparing to the previous year. Although, onion production was earlier expected to decline just 1-2% because the onion cultivation areas had been extended. Despite of the foreseen production decrease, onion harvest 2007 will be somewhat higher than in 2004 and 2005 when the rapid growth of the inner onion production was observed.

The market players were surveyed on Fruit-Inform.com portal; according to the provided information, no unanimous opinion exists on market regarding the price, as any of the suggested price ranges achieved the convincing majority vote. So, 22% of the respondents thought that late onion varieties may be sold for $0.16-0.2/kg on EXW terms in the southern regions of Ukraine. Another 16% of respondents believe that the average sales price would constitute $0.2-0.24/kg. As a result, 38% of the respondents think that onion may be purchased for $0.16-0.24/kg during the harvesting period.

At the same time, more than 15% of the respondents think that onion may be sold for not more than $0.12-0.16/kg; 9% of the respondents expect the price drop down to $0.08-0.12/kg. There are also 5% of respondents forecasting the wholesale price for onion to drop lower than $0.08/kg. I.e., 29% are pessimistic.

There is a greater number of optimists, as more than 32% expect the wholesale prices for onion to get higher than $0.24/kg. 10% of them consider the sales price on EXW terms to occupy the level of $0.24-0.3/kg; 11% - on the level of $0.3-0.4/kg, and 12% of the respondents believe the wholesale price for onion is to grow higher than $0.4/kg.

The analysts of ""Agrooglyad: Vegetables and Fruits" weekly" will release their forecast in September after the information from various regions of Ukraine is updated and the situation in Poland is thoroughly analyzed. At the present moment the prices for onion on the wholesale markets of Ukraine fluctuate $0.4-0.5/kg; they tend to decline. Approximately, the prices for onion in Poland are on the same level.