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Onion prices in China sliding

The prices of onions grown in areas with long and moderate sunshine duration are expected to improve this year, while those grown in areas with short sunshine duration are not likely to do better than in 2018.

The reasons are listed below:

First, China’s economy in 2019 has not been optimistic. All commodity prices have fallen, putting downward pressure on the prices of agricultural products. The economic downturn has also led to a decline in consumption.

Second, seasonable vegetables may experience serious slow sales in the autumn of 2019. Due to a rainstorm in August 2018, greenhouses in Shandong were flooded, and vegetable prices were very good after. In Inner Mongolia, northern Shaanxi, and the northeast, 2018 brought the highest revenues for vegetable growers over recent years. It is then not a surprise that there has been a huge expansion in acreages in 2019, which has resulted in slow sales of most vegetables.

Third, high enthusiasm for planting prevailed areas with long sunshine duration, and the overall acreages have increased. Judging from the current situation, the area of ​​onions in northeastern China and Inner Mongolia will increase significantly next year.

Last but not least, in 2019, the storage of onions has greatly reduced. The volume of products put into cold storage in areas with moderate sunshine duration in 2019 is expected to be significantly lower, as storage onions from those areas suffered from severe losses, and the acreages in areas with long sunshine duration are expected to increase. This is expected to suppress the prices of products from Gansu which recently became available on the market. With the increase of the marketed volume and the non-existent enthusiasm of the storage companies, prices are expected to decline continuously, and there may be a risk for serious slow sales in October.

Lastly, the production is not likely to reduce this year as in 2018, which was mot an ordinary year, especially in autumn when vegetables were effected by overly abundant rainfall, diseases, and insects, leading to significantly lower production of all vegetables. The production of onions was about 20% lower. This means, if 2019 is a normal year and acreages remain the same, the production will be 20% higher than in 2018.

Source: Today's Headlines

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