The average Mintec price of UK onions for the first three weeks of September 2021 was GBP 0.49/ 25kg, 1.2% higher than the average price in August 2021, and 17% higher than the average price in September 2020. The increase in UK onion prices can be primarily attributed to increasing input costs.
UK growers are facing higher costs for fertiliser, energy, transport and labour. Accordingly, to retain profitability, these costs are being passed onto consumers. Fertiliser costs have soared in 2021, mainly driven by solid demand, and prices are projected to average more than one quarter higher in 2021 than in 2020. Meanwhile, energy costs are at record highs, with the UK gas and power prices currently trading at unprecedented levels.
Furthermore, transport and labour costs have been rising in 2021, with restricted travel continuing to impact the flow of migrant labour from Eastern Europe to the UK. The UK imports a vast majority of its onions from Europe. The current shortage of lorry drivers and high shipping costs have made importing from Denmark more expensive, passing the additional cost to the importer.
The UK is expecting an average yield this year, despite the extreme weather conditions experienced earlier. The first quarter of 2021 was particularly wet, with significant rainfalls in January and February. March was dry, which allowed the planting of onions; however, frosts in April halted plant growth. The weather was better after that, but the quality of the 2021 crop is yet to be fully determined. Demand for onions in the UK has been robust over the last few months, in line with the reopening of the foodservice sector, and retail sales remain strong.
UK onion prices are likely to continue on an upward trend for the remainder of the year, with input costs projected to remain firm.