Namibia: Lack of onion storage leads to increased imports

The lack of storage facilities for surplus onion production in the country is hindering self-reliance and fuelling imports during the off-season, said a recent Namibia Agronomic Board study.

The study established that the Namibian market has a surplus of onions after the harvest season every year but due to the inadequate storage capacity in the country, the surplus does not last.

The oversupply of local onions occurs during the production season (May to December), whilst a shortage of local supply is habitually experienced during the off-season (January to April) according

This prompted the board to undertake a study to examine the storage options for surplus local production, with an eye to enabling self-sufficiency in the supply of onions, and thereby reducing imports from South Africa, which currently stand at 43% of annual demand.

Onions are the second-most consumed vegetable in Namibia, after potatoes.

The board indicated that on a 3-year average (2015/16 to 2017/18), 43% of onions consumed annually were imported from South Africa. Of these, 90% of the imports occurred during the first quarter, January to April.

There are currently four farms in Namibia with small storage operations, mostly within the maize triangle between Otavi, Grootfontein and Tsumeb. The four farms, however, supply minimal quantities and their output alone is insufficient to address the current supply challenges during January to April.

The NAB study analysed various onion storage options, starting from a minimum capacity of 2000 tonnes, that the state or private investors could invest in to fill the import gap.

The options were evaluated in terms of a financial model, taking into account the storage cost per tonne, the net present value (NPV) of any envisioned investment, the potential payback period and the required start-up costs.

The study indicated that there are five storage options, split into two categories, that investors can look to in order to store the country's surplus: open ventilated systems, in the form of rental cages or purchased cages, or controlled environment systems, which are available in the forms of bulk pilling, rental cages or purchased cages.

According to the study, all five storage options have storage costs per tonne ranging from N$1 950 to N$2 340, and each option would require start-up capital ranging from N$17,5 million to N$21,2 million in order to get the project off the ground.

However, using NPV projections, NAB estimated that investors would recoup their investment within three years and two months of initiating operations, with potential returns on their investment between N$9 million and N$15,4 million.

Over and above the revenues detailed in the findings of the study, there is also a possibility to harvest onions during the off-season in Namibia.

However, the success of such out-of-season efforts will depend entirely on employing the right methods of production at the south-central region, requiring the careful selection of cultivators, and some astute timing with regards to planting and harvesting.

The total domestic production of onions has, over a three year period (2015/16- 2017/18), averaged roughly 11,766 tonnes, with domestic consumption standing at 5 729 tonnes, while an average of 8,483 tonnes were exported annually.

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