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Onion prices in the EU significantly higher than last year

In many countries of the EU-28, onion prices are much higher than last year; the main cause for this may be the lower supply from this year's harvest, say experts of BGZ BNP Paribas.

According to AMI informiert, in Germany, at the beginning of September, prices amounted to 19 Euro/100 kg (producer prices) and were 90 percent higher than a year earlier, but about 33 percent lower than two years ago.

The increases can also be observed in the UK market. In August, the average price of a kilo of onions in the wholesale in the UK was of 0.33 pounds per kilo, i.e. nearly 14 percent more than in the same period last year (data from the Department of Environment, Food and Rural Affairs).

In Poland, the purchase price of onions for direct consumption in August, according to the Ministry of Agriculture, amounted to 0.88 zł/kg, compared with 0.68 zł/kg in the previous year.

According to analysts of BGZ BNP Paribas, the main reason for the increase in prices in the EU market is likely to be the lower supply from this year's harvest. It should be noted, however, that prices were actually lower than last year's in July in most markets of the European Union due to high stocks of onions from the previous season. In Germany, as a result of drought, vegetable yields are expected to be reduced, even for irrigated crops. In Spain, as in France, the drought has also resulted in a greater share of smaller size onions and they also expect a lower production. The Balkans and the Netherlands, despite the greater acreage, also expect a smaller harvest.

Demand for onions in the global market remains high, despite the continuing impact of the Russian embargo. According to Eurostat data, total exports of onions from the European Union (data for the 11 months of the season) in the 2014/2015 campaign increased by 27 per cent to 852 thousand tonnes. High demand is registered in South America, especially Argentina and Brazil, where the vegetable harvest has been historically low due to unfavourable weather conditions. In Brazil, the EU's onion sales during the first 11 months of last season increased by 16-fold to 115 thousand tonnes. We can assume that this trend will continue also in the second half of 2015, as pointed out in the report from BGZ BNP Paribas experts.

Higher exports were also recorded in African countries (Côte d'Ivoire, Guinea) and Asia (Malaysia, Israel). The limiting factor was the demand to ban the import of onions by Senegal at the beginning of this year. Still, total exports to this country during the period at hand increased by 21 percent, to 159 thousand tonnes. Quite a substantial growth rate was also recorded in the volume of sales to Belarus (2.2-fold to 16 thousand tonnes), compensating to some extent the decrease in exports to the Russian market.


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