Onion Price Trend and Forecast

Onion Regional Price Overview

Get the latest insights on price movement and trend analysis of Onions in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Onion Price Trend for the First Half of 2024

In the first half of 2024, onion prices in India experienced significant fluctuations due to a series of policy changes, supply dynamics, and market expectations. At the start of the year, the Indian government had imposed a ban on onion exports, which was extended in March, leading to a controlled supply within the domestic market. However, this ban was lifted in early June, with the government simultaneously imposing a minimum export price of $550 per metric ton and a 40% export duty, aiming to balance domestic supply and stabilize prices.
 

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Despite these measures, onion prices saw a sharp rise in late May and early June, driven by increased demand ahead of Eid-al-Adha and speculative hoarding by traders and stockists. In key markets like Nashik, the wholesale price of onions reflected a 30-50% increase within two weeks. Top-quality onions commanded even higher prices. This price surge was largely attributed to the anticipation of further price increases due to potential government policy shifts, along with a projected decline in the rabi harvest. The combination of these factors kept onion prices elevated as domestic demand remained robust, particularly in southern states, despite the export restrictions.

Analyst Insight

According to Procurement Resource, despite efforts and increased acreages, Onion prices are likely to remain inflated in India in the coming months as well. Unpredictable weather changes and rainfall patterns have also contributed to the insufficient yields.
 

Onion Price Trend for the Second Half of 2023

In the second half of 2023, onion prices in India experienced significant fluctuations, primarily due to adverse weather conditions and subsequent government interventions. High temperatures and heavy rainfall in key onion-producing states like Maharashtra and Karnataka damaged a substantial portion of the stored rabi crop, leading to a sharp rise in prices. By mid-August, retail onion prices had increased by 20% year-over-year; the lean season arrived earlier than usual as rabi stocks depleted faster, pushing prices up further by late October.

In response to the soaring prices, the Indian government imposed a 40% export duty and set a minimum export price (MEP) of $800 per metric ton to curb exports and boost domestic supply. Additionally, the release of buffer stocks at subsidized rates was initiated to stabilize the market. Despite these efforts, wholesale prices remained volatile, with onions in Lasalgaon, India’s largest onion market, peaking at ?4,800 per quintal in late October before plummeting to less than ?2,000 per quintal by early December.

This sharp decline in prices led to significant financial losses for farmers, particularly in Maharashtra, as market rates dropped below production costs. The period underscored the delicate balance of supply and demand in the onion market and the critical impact of timely government intervention.

Analyst Insight

According to Procurement Resource, with the recently imposed export ban, the Onion prices are likely to sustain buoyancy for some time in the near future.
 

Onion Price Trend for the First Half of 2023

The prices of onions expanded globally in the first and second quarters of 2023, which in turn adversely affected the consumer purchasing appetite. In the Philippines and most Asian countries, the cost of onions even surpassed chicken and other non-vegetarian options by almost 25-50%. However, during these drastic changes in the prices of onions, the demand for them did not decline as it is a staple food around the globe, thus driving its price trend towards an inclining trajectory.

The main causes of this shoot-up were global inflation, extreme climate conditions, and severe disruptions in the supply chains. The inflation rates have been hiked because of the poor condition of the global economy, and thus, to keep the market activities afloat, the traders and manufacturers had to increase their price quotations. Further, the majority of Asia-Pacific and European countries suffered from extreme weather conditions such as heat waves, hailstorms, and unseasonal rains, which negatively impacted the stockpile levels. In addition to this, the ongoing Russia-Ukraine crisis blocked several trade routes, leading to disruptions in the supply chains and thus eventually causing the prices of Onions to incline.

Analyst Insight

According to Procurement Resource, the price of Onions is estimated to showcase an oscillating trajectory as with the improvement in the production of Onions and the effectiveness of the supply chains, the growth of Onions prices is expected to decline.

Procurement Resource provides latest prices of Onion. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.