Analyzing the Impact of Supply Surplus and Prospects for Market Recovery
The onion market in Spain faces significant challenges as supply continues to outweigh demand, leading to a sharp decline in prices since the onset of this year’s harvest season.
Currently, average prices at origin stand at approximately 0.10 euros per kilo, significantly below the production costs estimated at 0.25 euros per kilo. This disparity has been exacerbated by ongoing European production from the previous season, which exceeded initial projections. Additionally, imports from the southern hemisphere have compounded the oversupply, alongside expanded early Spanish onion harvests, increasing acreage by approximately 25%. Notably, these expansions primarily involve free plantations outside regulated programs, which have been particularly vulnerable to the resultant price collapse.
As a consequence of the surplus, many growers have faced the difficult decision of abandoning and even destroying portions of their crops. According to Luis Fernando Rubio, director of the Onion Producers Association of Castile-La Mancha (Procecam), the key to stabilizing the market lies in depleting last year’s surplus and subsequent increases in industrial demand.
“As soon as last year’s onion surplus is used up and the demand from the industry increases, the market should recover its stability,” Rubio asserts. This anticipation reflects a cautious optimism among industry stakeholders, highlighting the cyclical nature of agricultural markets and the strategies required to navigate through periods of volatility.
