Uzbekistan's onion market has been rocked by a significant drop in wholesale prices, reaching an unprecedented low of UZS 1500, or a mere $0.12 per kilogram, according to the latest monitoring results by EastFruit.
The situation, outlined in a comprehensive report by EastFruit, paints a dire picture for Uzbekistan's onion industry. With wholesale prices plummeting to historic lows, the cost of onions now stands at less than half the typical price for this time of year, which typically hovers around $0.24-0.26 per kilogram. Moreover, compared to prices a year ago, onions are now a staggering 4.4 times cheaper.
However, the boom in exports has come at a cost. With farmers and traders stocking up on onions during the fall for resale in the spring, the market has been inundated with surplus produce. As a result, the real price of onions is plummeting towards zero, leaving stakeholders scrambling to offload excess inventory.
EastFruit's analysis shows that, the surplus is so significant that an estimated 150,000 to 200,000 tons of onions may need to be discarded or repurposed as cattle feed.
Andriy Yarmak, an economist at the Food and Agriculture Organization of the United Nations (FAO), highlights that price collapses, such as the one witnessed in the onion market, are common occurrences in certain agricultural sectors. He emphasizes that the demand for onions is relatively inelastic, meaning that regardless of price fluctuations, consumer behavior remains relatively stable. Whether prices are high or low, people's consumption of onions tends to remain consistent, as it is often an essential ingredient or accompaniment to various dishes.
EastFruit analysts also forecasted that Uzbekistan is poised to enter the ranks of the world's top five onion exporters by the conclusion of the 2023/24 season.
Earlier Daryo reported that experts predicted setbacks in the early onion harvest and expected delays in harvesting, which could prolong the sale of stored onions.
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