The wholesale price for this product dropped to 1,500 soums last week, which is equivalent to 12 cents. In other words, now you can buy more than 830 kg of onions wholesale in Uzbekistan for $100. This is stated in the results of monitoring conducted by EastFruit.
According to the above graph, such low prices for onions at this time of year have not been observed in the country over the past 5 years. In particular, in the corresponding period last year the price was 4.4 times higher than now. The normal price for this period of the year is approximately 2 times higher and is about 24-26 US cents.
However, the problem is much more serious than the graph shows. The fact is that the prices that we show in our monitoring are the prices of small wholesale transactions. If we talk about the price at the level of a farmer or trader who purchased onions in the fall for resale in the spring, then the real price for such onions is currently tending to zero, and it will not be possible to sell all the stocks of onions from the 2023 harvest.
EastFruit has calculated that at least 150-200 thousand tons of onions in Uzbekistan alone will have to be sent to a landfill or given to livestock feed, as farmers in Kazakhstan began to do earlier. Therefore, you should not be surprised if this week prices for last year’s onions fall even more significantly.
Naturally, this situation does not please farmers at all, and even less does it please those who wanted to make money by reselling onions in the spring, because losses for such entrepreneurs reach 100%. Therefore, it is worth understanding the reasons for the situation with overproduction of onions in Uzbekistan and in the region as a whole, which is so tragic for many. Because there are similar problems in Kazakhstan and Kyrgyzstan.
Andriy Yarmak, an economist in the investment department of the Food and Agriculture Organization of the United Nations (FAO), explains that such price collapses are quite standard in some segments of agribusiness. And onions are one of them.
“The demand for onions is not elastic. In other words, no matter whether onion prices are high or low, the demand for it does not change significantly. If prices are low, people will not consume more onions, because it is only an ingredient in other dishes or part of a side dish, and if prices are high, then there is nothing to replace the onion with, and they have to buy it,” explains Andriy Yarmak.
It was previously reported that from mid-March to the end of June 2023, 222.8 thousand tons of onions were exported from Uzbekistan abroad. This is considered a record figure and is 53% more than for the same period in 2022.
