The week-long monitoring carried out by EastFruit on the wholesale prices of onions in Uzbekistan has shown a substantial decrease. This week, the wholesale cost for this item decreased by 1500 Uzbekistani som, which is about twelve U.S. cents. This implies that in Uzbekistan it is now possible to buy over 830 kg of onions for only 100 U.S. dollars.
The chart below shows a historical low in the price of onions in this period in the calendar. Comparing to the year before the price of onions was 4.4 times more expensive this year’s price is unheard of. The typical cost range during this time ranges from 24 to 26 U.S. cents.
The issue goes beyond the scope of what is shown in the graph. Prices we monitor represent tiny wholesale transactions. When we look at the eyes of farmers or traders who bought onions during the fall and then resold them in the spring, the real cost of these onions could be close to nothing. Solding all of the onions of the harvest in 2023 becomes an unachievable task.
We estimate that within Uzbekistan alone, around 150 to 200 thousands of tons of onions could need to be eliminated or used as feed for cattle this is a scenario that’s already taking place for the farmers of Kazakhstan. Therefore, it shouldn’t not come as a surprise if the prices of last year’s onions fall even more in the coming week.
The burden of this situation is a major one for farmers. Those hoping to make a make money from the sale of onions during spring face massive losses that can reach 100 percent. Knowing the root causes of the harrowing overproduction of onions in Uzbekistan and across the area is vital. Similar issues continue to be faced in Kazakhstan as well as Kyrgyzstan.
Andriy Yarmak, a renowned economist with The Investment Department of the Food and Agriculture Organization (FAO) discusses the phenomenon. He says that the demand for onions is not elastic. If prices are either low or high, people’s consumption of onions is steady. If prices are lower people won’t be able to take in more onions since they’re mostly used to make ingredient in different dishes or garnishes. When prices are higher it’s impossible to find a alternative to onions that would prompt customers to buy onions.
In the past this year EastFruit analysts regularly warned about the imminent threat of an overproduction of onions within Central Asia. The article we wrote with the title “Will Uzbekistan be able to keep from a fall in the price of onions? ” It was released in August 2023, generated many inquiries from people contemplating buying onions to sell in spring. We are pleased to report that our analyses have helped a number of entrepreneurs avoid significant losses, by revising their plans.
It is interesting to note that despite the drastic decrease in the demand for onion seeds across the region in the new year, price increases for onions aren’t guaranteeable. The onion remains a profitable crop. On the Telegram channels, onions outperform with a large margin over the vegetable crops, when it comes to forecasting profitability in the coming season.
Source: east-fruit.com