EastFruit analysts have reported a notable uptick in onion prices in Uzbekistan, citing a surge in exports to the European Union as the primary driver. Since mid-January 2024, wholesale prices of onions have surged by 28%, marking an increase of $0.04 per kilogram.
Despite the recent surge, current onion prices in Uzbekistan remain significantly lower than those recorded in 2023, and they also stand below the prices during the harvest. This, however, poses a challenge for local wholesalers who are struggling to turn a profit and are engaging in tough negotiations with buyers to maximize their earnings.
Market participants attribute the recent spike in onion prices to a substantial rise in export volumes to European Union countries. The wholesale markets of Poland have seen an influx of onions from Uzbekistan, contributing to stabilizing domestic prices in the country.
Interestingly, the disparity in wholesale onion prices between the Polish and Uzbek markets is not substantial enough to cover the costs of exports. Analysts suggest that government subsidies for transportation play a crucial role in overcoming this challenge. Furthermore, reports from Poland indicate the active involvement of intermediaries from Belarus in the onion trade. These intermediaries purchase onions from Uzbekistan and Tajikistan, reselling them to Poland at attractive prices.
Andriy Yarmak, an economist at the Investment Centre of the Food and Agriculture Organization of the United Nations (FAO), highlights the anticipation among market participants for a continued increase in onion prices in the European Union. This surge is expected to aid Central Asian countries in avoiding a collapse in wholesale prices for onions from the 2023 harvest, especially given the unusually high stocks.
“However, for onion exporters from Uzbekistan to maintain present prices levels it is important that the rate of growth in onion prices in the EU increases soon,” Yarmak cautioned.
The costs of logistics currently absorb the bulk of the price difference, and the quality of stored onions is diminishing due to rising average daily temperatures.
Uzbekistan stands among the world's top ten exporters of fresh onions, with annual exports ranging from 200,000 to 250,000 tons. The 2023/24 season is anticipated to set a new record, with estimates suggesting onion exports from Uzbekistan could surpass 300,000 tons for the first time.
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