Onions have become cheaper than dirt in Kazakhstan as farmers struggle with a massive oversupply of the vegetable, leading to a drastic drop in prices, EastFruit reported. Analysts had predicted this onion bubble as early as June 2023, and now their forecasts have come to fruition, causing disruptions in the local agricultural economy.
The oversupply issue has been exacerbated by a series of factors, including favorable harvest conditions and a lack of demand both domestically and in key export markets. A viral video showing farmers feeding onions to livestock highlighted the desperate situation faced by growers who are unable to find buyers for their produce.
As per the estimates, the stocks of onions from the 2023 crop in Kazakhstan have exceeded local consumption levels by 160,000 tons or possibly even more. This surplus has led to a sharp decline in wholesale prices, plummeting from $300 per ton at the start of harvesting to a mere $33 per ton currently – nearly a tenfold decrease.
The reliance on the Russian market, which typically absorbs 90-95% of Kazakhstan's onion exports, has further compounded the problem. However, with Russia also experiencing a bountiful harvest, demand for Kazakh onions has dwindled, leaving farmers with mounting inventories and diminishing returns.
Adding to the challenge is the onset of the new onion crop in southern regions of Central Asia, which is anticipated to yield another ample harvest, prolonging the period of oversupply and depressed prices.
Kazakhstan's agricultural sector, particularly its vegetable trade, has been under scrutiny in recent years due to its significant dependence on imports. While neighboring countries in Central Asia maintain either positive or balanced trade balances in vegetables, Kazakhstan has consistently been a net importer.
Onions, along with potatoes and tomatoes, constitute a substantial portion of Kazakhstan's vegetable exports, comprising 77% of all export earnings. However, despite efforts to bolster other export items such as cabbage, cucumber, and carrots, the impact remains limited compared to the dominance of onions in the export market.
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