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China: Trend of falling onion price is hard to reverse
Since the end of May, the market price of onions has been dropping all over the country. At the moment, the sale price is as low as the cost price. Will it bounce back in the future?
I. The production sites had already reached a large scale when the onions entered the market. Now, the price of yellow onions is better than the price of red onions.
1. The price of yellow onions only has limited room to change.
2. At the end of June, large amounts of red onions will enter the market from Shandong, Jiangsu and Henan, so the supply is sufficient. The price may drop to 0.20 yuan/500g. Even though the price is now equal to the cost price, it is still hard to reverse this trend of dropping prices.
II. The demand is limited, which is hard to raise in a short period of time. We will analyse the demand from three perspectives: export, stock, and downstream markets.
1. Korean onions have now entered the market, so the export market is weak.
2. The downstream markets buy at will, so the price is fluctuating often.
3. Stock grows smaller, as rental costs are increasing.