Onions from various production areas in Yunnan recently entered the Chinese market in succession. The overall production volume of Yunnan onions declined this season and their purchase price is relatively high. Although the shipping fees are slowly coming down, they are still much higher than the added value of onions. That is why the order volume remains small. One onion exporter recently talked about the current conditions for onion production, purchase, and export.
"The onion harvest in Yunnan started late this season because of unfavorable weather conditions. In previous years the onions entered the market in large volumes in the middle of March, but this season they only arrived in large volumes in late March," said the onion exporter. "In addition to the early-season onions, the market now also receives the first mid-season onions. The market supply volume is growing, and visiting traders are buying larger volumes. However, the overall production volume declined due to unfavorable weather conditions, so the price is rather high. The current price of purple and red onions outside the warehouse is around 1.4 yuan [0.22 USD] per kg, while the price of yellow onions is around 2.2 yuan [0.35 USD] per kg."
As for export, the current FOB price is around 500 USD per ton. For many companies the export of onions practically stopped when the shipping costs soared. Some companies still exported to Eastern Europe and Russia, but that market has closed now as well," said the onion exporter. "There are many reasons for the steep decline of the onion export volume. The overall surface area devoted to onion plantation shrunk this season, the product quality was sub-optimal, the yield low, and the price of top-quality onions was pushed up. Moreover, in addition to soaring shipping fees and the high price of onions, exporters also suffered from the appreciation of the Chinese yuan. That is why there is virtually no overseas demand. The order volume is extremely small."
"Shipping fees are showing a downward trend, but the decline is not that significant. Last month the price of shipping between Qingdao and Rotterdam is 12,500 USD per shipping container. Now the price is 10,500 USD per container," said the onion exporter. "The cost of shipping is still too high compared to the product value of onions. The cost and the added value simply do not compare. Only when the cost of shipping drops below 8,000 USD per container can we make a profit on the export of onions."
In addition to onions, this exporter also deals in large volumes of ginger. "We experienced excessive rainfall last year, but because the harvest was abundant, some processing factories did not manage to filter out the ginger that was affected by heavy rainfall. There are some problems with product quality as a result. The overall product quality is not very stable."
"The price has been stable. The current price of ginger exported to the Netherlands is 1,350-1,400 USD per ton. The price is unlikely to fluctuate much in the short term."
"Many Chinese exporters are unable to deliver their agricultural products to Eastern Europe or Russia due to the Russian invasion of Ukraine. Exporters are instead looking for buyers near the ports where their products stranded. The pressure to clear congested ports and sell off the products has pushed the price down. Many exporters are losing money," said the onion exporter.
