EastFruit analysts point out that wholesale prices for onions on the Uzbekistan market are currently on average almost three times lower than a year earlier at the same time. In addition, so far there are absolutely no prerequisites for their growth. Moreover, since October 2023, wholesale prices for onions in Uzbekistan have decreased by 18%. Considering record volumes of onion exports and a sharp increase in shipments of Uzbek onions to the EU countries in December 2023, such a price decline could be explained only by one thing – there is just too much product on the market!
Although today is not the first of April, and there are still three whole months before the start of April, let us recall that the majority of market participants we surveyed believed in a sharp increase in onion prices by that date, and 19% of them were confident that prices would at least double. In particular, for Uzbekistan, the average expectations of market participants were around 23.5 US cents per kg at wholesale level and the optimal prices were closer to 35 US cents.
However, in order to reach a price of even 23.5 US cents per kg in Uzbekistan by April, onions must rise in price by 62%. Although such a scenario is not completely unrealistic, the complete absence of price increase trends now indicates the difficulty of its implementation. Moreover, there is not much time left before the start of harvesting the new onion harvest in Uzbekistan.
In August 2023, EastFruit analysts described in detail the reasons why expectations of rising onion prices in Uzbekistan may not be realized. Since then, a number of events have occurred in the global onion market, which have significantly improved market conditions. It is for this reason that there is good news – a price collapse has so far been avoided. However, the surplus of onions continues to put pressure on the market of Uzbekistan, and there is less and less time to sale, because the new harvest may turn out to be quite significant.
Why, despite the absence of a collapse in onion prices, are entrepreneurs who invested their own and borrowed money in purchasing and storing onions for the purpose of resale at a higher price are now under stress and unable to sleep?
For more information: east-fruit.com