Global Update: Price of Chinese Onions Drop as Supply Increases

Article by: Hari Yellina

The price of onions has plummeted as a result of multiple onion production locations in China currently supplying huge amounts of onions to the Chinese market. Furthermore, because transportation costs are decreasing, a lot of exporters have begun to make orders for the onion export market. Mr. Wang, sales manager of Shandong Zhuoyi Import and Export Co., Ltd., discussed the present state of the onion export market lately. Mr. Wang claims that the peak season for onion supply to the Shandong market has arrived. Other onion-producing locations, such as Feng county in Xuzhou, Jiangsu, and Tongxu county in Kaifeng, Henan, have also begun harvesting their onions.

Last year’s profits were poor, and several traders lost a substantial amount of money. Because the risk is so great this year, traders with warehouse space are hesitant to stock their warehouses with onions. “The current FOB price of peeled onions from Qingdao is roughly 650 USD per tonne, which is significantly less than the price in April.” 8cm yellow onions from Shandong cost roughly 1-1.2 yuan per 0.5kg [0.15-0.18 USD]. 8cm red onions cost roughly 0.8-1.1 yuan for 0.5 kilogramme [0.12-0.16 USD]. The start of the onion harvest in Yunnan, Sichuan, Jiangsu, and Shandong is the key reason for the price drop.

Because there is so much supply on the market, the price reduces “Mr. Wang stated. “On the worldwide market, however, low-cost onions have a competitive advantage. For more than a year, Chinese onion exports were virtually suspended, although abroad purchasers have recently begun to inquire about current prices.” Gansu is one of China’s most important onion-growing regions. Both the weather and the soil conditions are ideal for onion planting. Gansu has a large onion production volume and a high-quality product. That is why international customers choose Gansu onions.” The onion harvest in Gansu is projected to start in late July, with the first supplies arriving in August.

However, it is still too early to talk about Gansu onion prices. Weather, harvest circumstances, overall surface area devoted to onion cultivation, production volume, and other factors influence the price.” “Because onions have a low product value, many onion exporters suspended operations when shipping prices began to climb last year. They used to export limited quantities of peeled onions to the United Kingdom, but that has ceased as well. The cost of shipping was simply too high “Mr. Wang stated. “However, beginning in March, freight costs began to decline. The cost of shipping a container from Qingdao to Europe is currently between $8,500 and $9,500 USD.

Although shipping costs are likely to drop even lower, the product value of onions remains low, therefore it will be some time before onion export becomes profitable again.” Shandong Zhuoyi Import and Export also sells frozen diced onions, frozen onion slices, and frozen onion rings in addition to whole onions. “Because these products can be frozen for a long time, their price is not affected by external circumstances.” That’s why we’ve been exporting our frozen onion goods.”