Recently, onion prices have experienced an initial increase followed by a decline, with fluctuations in demand emerging as the primary driver of price changes. Demand for onions in both domestic and international markets has shifted from strong to weak, leading to a market trend of rising prices followed by a drop. In January, the market was primarily supplied by stored old onions, with a limited supply of high-quality onions. However, from February to March, as new onions entered the market and the quality of stored onions deteriorated, the negative impact on supply became more pronounced, increasing the likelihood of price declines.
Following the National Day holiday, most vegetable prices in the domestic market remained high, and demand for onions—positioned as a mid-priced vegetable—remained strong. In early November, with the conclusion of goods transfer in production areas, storage companies were reluctant to ship in the short term, creating temporary supply constraints that pushed onion prices higher. However, from late November onwards, the supply of winter vegetables increased significantly, particularly cabbage and radish, which were available in large quantities at lower prices. As a result, onions lost their price advantage, leading to a sharp decline in terminal demand and weaker domestic sales support. Since late November, new onions from India and Pakistan have also entered the market. Due to the high price of Chinese onions, some trading partners in Southeast Asia and South Asia have reduced their orders from China, leading to a decline in export volume. The combination of weakening domestic sales and reduced export demand has caused Chinese onion prices to fluctuate and decline from mid-November to the end of December.
January, traditionally a peak period due to the Chinese New Year, saw a general increase in vegetable prices, providing some support for onion prices. Additionally, since mid-November 2024, domestic traders have been navigating a volatile and downward-trending market. To minimize risks associated with future shipments, many traders accelerated the sale of their existing inventory. Consequently, by early January 2025, traders had largely depleted their stocks. As mid-January approached and downstream markets prepared for the holiday, demand for high-quality onions temporarily increased. This led to a tightening supply of high-quality onions from production areas and cold storage, driving prices upward.
After the Chinese New Year, the supply of new onions from Yunnan has increased daily. Regarding the onion market supply in February and March 2025, some traders indicate that China's total supply exceeds that of previous years. As the availability of new onions continues to grow, supply and demand dynamics are gradually stabilizing, creating a risk of further price declines.
Source: Sublime China Information