EastFruit analysts receive many questions from market participants regarding the prospects for onion pricing. People ask what is better: selling onions now or storing them until winter or even spring?
We will try to answer this question, since our team has people who have been analyzing the fruit and vegetable markets for more than 20 years and have encountered similar questions many times. We will break this question down into components, but we will start with the results of a survey about the intentions of market participants, which was posted in our Telegram channel. We asked, “What is your onion sales strategy this season?” and received the following answers.
Thus, if you trust the survey results, the bulk of the onions are stored – namely, 56-57% of the survey participants plan to store onions until spring in the hope of getting a higher price. Accordingly, a smaller share is sold now.
It should be noted right away that the situation may differ significantly in different regions and individual countries in the region. The survey was conducted among readers of our channel, most of whom are from the former USSR countries of Eastern Europe and Central Asia. Another important note – we will only talk about yellow onions here. Why this is important – see the section dedicated to the global onion market.
Market specifics of the onions
“Fresh onions are a product with a completely inelastic level of demand. In other words, if onion prices rise, its consumption does not decrease much, because there is absolutely nothing to replace onions in recipes with. Likewise, if onion prices drop to zero, no one will consume more onions as this wouldn’t occur to consumers. In fact, there are not so many similar products as onions arounds, and this is what makes them unique,” explains Andriy Yarmak, an economist at the Investment Centre of the Food and Agriculture Organization of the United Nations (FAO).