The Voice of China reports that this is the season when onions enter the market. However, the abundant production per hectare did not bring farmers the reward that they were hoping for. The price of onions in Yunnan, one of the main onion production areas, has already fallen to its lowest point. Farmers anxiously await an improvement of market conditions. Why did the price of onions drop so dramatically?
Onions
Supply exceeds demand. This is one of the main reasons for the onion price drop. Apart from this, there is competition from other vegetables and the quality of onions is not as good as it was in previous years. Onions compete with leeks, potatoes, and young garlic shoots, but market demand is depressed, delivery speed is slow, and supply exceeds demand.
In addition, the onion harvest in Xichang, Sichuan, suffered from weather conditions as well as neglectful management by farmers. The overall quality of onions this year is lower than it was last year. Finally, since onion quality is relatively poor, the onions do not meet export standards. Exporters purchase small volumes, and the rest floods the domestic onion market.
As temperatures increase, onions need to enter refrigerated storage. This increases the cost price. This further eats into the profit of onion traders. It is not entirely certain that they can recover the cost price of refrigerated storage.
Source: cnr.cn