"Oversupply in China putting pressure on onion prices"

"There are many onion production areas in China, and onions here can be harvested almost continuously throughout the year. Products currently on the market are mainly from Shandong. Shandong hasn’t experienced abnormal weather conditions recently, so the harvest has not been affected,” according to Zhang, a seller in Jinan, Shandong.

“The price of locally gown onions has been continuously falling, with the purchase price of about 2 yuan/half a kilo in January to 0.4 yuan/half a kilo in early May. As of now, the price in Shandong is only about 0.5 yuan/half a kilo, much lower than the same period of last year,” Zhang said. “The lower prices seen in the past few months were mainly a result of the COVID-19 outbreak. Large volumes encountered issues in export, resulting in oversupply in the local market and consequently a sharp drop in prices. In addition, onions from India flooding on to the market has also had some impact on international prices. The twofold impact on the domestic and overseas markets has led large volumes that should have been supplied to overseas markets to only be marketed in the Chinese market over recent months.”

"In response to the lack of momentum in overseas markets, we have temporarily suspended our export plan this season and focused our sales on the domestic market. This year we plan to sell about 300 containers in China. Currently, although prices are generally at a low level, the volume of orders and the speed of market sales are fairly normal."

“Overall, the planted area of ​​several production areas nationwide this year is higher than last year,” when talking about the market development in the coming weeks, the manager said. “Onions from the Xuzhou area of ​​Jiangsu became available recently. In early June, Onions from Jinxiang, Shandong, and other places will also arrive at the market, and market supply will increase further by that time. Therefore, I do not expect onion prices to pick up significantly in the foreseeable future and I expect them to remain at a relatively low level."

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