India, one of the world's largest producers and a major consumer of onions, is experiencing oversupply which has caused prices to drop by 32.2% year-on-year (y-o-y). Mintec’s price of Indian onions currently sits at €166.14/MT for April. Market sources attributed the price drop to a rise in acreage and early crop maturation, brought about by a spike in temperatures over northwest India in February 2023. The March to May period accounts for as much as 75% of the total Indian onion output, so pressure on prices is expected in the short term, according to market players. Low investment in storage facilities also means that onion production has overwhelmed storage capacity.
In contrast, market sources indicate that the EU is facing an onion shortage of around one million tonnes amid robust domestic demand and a poor harvest in 2022, causing the price of EU onions to skyrocket by 400% y-o-y, to €700/MT in April. According to market participants, there is no expected price relief until the European harvest starts in summer, given the current production shortages across the region.
The onion markets in India and the EU are facing diverging challenges that cannot be resolved simultaneously. According to market players, India needs to focus on improving storage facilities and balancing onion production to prevent oversupply, which can be challenging if the weather is unpredictable. Meanwhile, the EU is seeking alternative sources of onion imports to meet the current demand until the upcoming harvest season. According to market sources, countries such as Egypt can offer more onions to the EU market which will support the market. Prices are reportedly “under pressure” rather than “rising,” as participants await market news.
