Reasons for the decline of Argentina's onion production

According to agronomist Daniel Lurman, the territorial coordinator of the EEA of INTA Hilario Ascasubi-CERBAS of the Colorado River Valley, the volumes of Argentine onions that have entered Buenos Aires' Central Market has decreased this year mainly because the weather has been drier, the area sown has decreased, and there is a lack of supply from Brazil. These issues, which many could consider minor, are of great importance as they determine the progress of the Buenos Aires onion campaign.

Lurman also said that, despite this decrease in production, it has not been a bad season and that "the early harvest, which comprises 25% of the total production, has already been marketed, while the season's onion, which is the remaining 65%, is being marketed at a fairly good rate."

"The main characteristic of this season is that it started without any serious sanitary issues. There were no cases of bacteriosis mainly because there were no heavy rains at the end of the cycle because of the high temperatures there were, which prevented the proliferation of fungi," he said.

Onion producers fear the rains that occur in the pre-harvest season the most because they are the ones that cause the most damage to their production. "These rains are what have mistreated the production the most in recent years," Lurman said.

The prices paid to producers of early onions in the field started at 80, 60 and 50 pesos, a significant decrease. According to Lurman, "prices have already recovered and are once again at their initial values, so one hectare of production, which can yield around 2,000 bags, produces around 60,000 pesos. This means that producers need 30 pesos to cover direct costs, without taking into account the lease of the land and other expenses, such as infrastructure. Thus, if a hectare yields about 1,300 bags, costs go up."

The supply of onions has also decreased because in the current campaign the producers of the Central Market of Buenos Aires have planted 25% fewer hectares of onion than in the previous campaigns, which had fluctuated between the 10,000 and 12,000 hectares. According to Lurman, "there are around 8,000 hectares devoted to onion production in this campaign because of the increased competition we face thanks to Brazil's higher production." 

According to Lurman, all these factors could vary according to market conditions. "If, for example, Brazil's harvest decreased and there were a lack of onions, Argentina's production will be worth more. This is the current scenario, as apparently the weather has been good for the onion productions throughout the region. For example, the onion from the south of Buenos Aires and Rio Negro will dominate the domestic market until the end of winter. We'll see what happens after. Even though the crop has a good quality crop, we'll have to see what happens in the winter with the domestic market because producers planted less."

Regarding the onions that Argentina has had to import, Lurman assured that they were very insignificant volumes bought from Brazil, mainly due to some problems in the production of Santiago del Estero, which had not yielded enough volumes. At a competitive level, the outlook is positive as, according to Lurman, "Brazil has included extra-community onions in the so-called LETEC (Lists of Exception to the Common External Tariff). This causes that, among other factors, this year the European onion will pay a 25% import tariff, which improves the competitiveness of the national onion. However, this tariff will be reduced in the following years: 20% in 2019 and 15% in 2020." 

According to data from the National University of the South (UNS) and Corfo Rio Colorado, Argentina plants 18,000 to 22,000 hectares of onion. In the rest of the country the calculations are made based on consultations with the onion chain.

In this campaign, producers planted some 3,500 hectares in the province of Rio Negro; around 3,000 hectares in the area of ​​Cuyo, and around 3,000 hectares in the Argentine north. Meanwhile, producers only planted about 400 hectares in Mar del Plata. "Based on this data, we could say that production has been atomized," stated engineer Lurman.

The south-southwest of Buenos Aires generally produces nearly half of the country's onion production, 60% to 70% of which is destined for domestic consumption.

The Mercosur seminar will focus on onion production and will have two different spaces, "one to analyze the global market and another one which will be a workshop about the future paths of the production's development in Mercosur", said Lurman.

These spaces will be the 21st Mercosur Onion Seminar and the 11th Provincial Onion Festival, which will be held for the first time at Hilario Ascasubi, from March 15 to the 18, 2018. Admission is free, but registration on the website is recommended. You can also find more information on Mercosur's fanpage on Facebook.

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