Chinese onion growers have kept a close eye on the price of Chinese onions ever since India prohibited onion export last year. The onion production areas in Gansu are representative of the Chinese onion industry. The price in Gansu has shown a steadily rising trend. The wholesale price of red onions was 1.8 yuan [0.25 USD] per kg in July of 2019. The market price even exceeded 3 yuan [0.42 USD] per 0.5 kg. People in the industry all thought the onion market prospects were excellent. Onion growers therefore expanded the surface area devoted to onion plantation in China.
The wholesale price of Chinese red onions destined for the export market was still around 2 yuan [0.28 USD] per 0.5 kg in the middle of January, 2020. However, following the outbreak of COVID-19, the onion export price suddenly dropped. The export price fell from more than 2 yuan [0.28 USD] per 0.5 kg to only 0.4 yuan [0.06 USD] per 0.5 kg. However, there is an even worse problem. Distribution has slowed down since the outbreak of COVID-19. Many traders are unable to transport their red onions. This situation is even worse for yellow onions, which are mainly produced for the export market.
Under these circumstances, traders with export products can only turn to the domestic market. The overall surface area devoted to onion plantation in China is huge. Furthermore, the onions in various production areas are harvested at different times. When the onion harvest in Yunnan moved from the export market to the domestic market, the price suddenly dropped. The retail price of red onions is now around 1.5 yuan [0.21 USD] per 0.5 kg. That is the price in supermarkets. In the vegetable market, the price is even lower, around 1.2 yuan [0.17 USD] per 0.5 kg.
This price is more than reasonable for consumers, but for onion growers this development is worrisome. Farmers still have onions in the ground, in particular in Shandong, Hebei, and Liaoning. They previously earned around 600 yuan [84.82 USD] per 0.07 hectare in the domestic market because onions from Yunnan were mainly destined for the export market. Now, however, the market is flooded with onions from Yunnan and by the time that farmers from Shandong, Hebei, and Liaoning harvest their onions, the domestic market will already be saturated. Their market prospects are not optimistic.
Source: Jinri Toutiao