Multiple onion production areas in China currently supply large volumes of onions to the Chinese market, so the price of onions has dropped. In addition, shipping fees are showing a downward trend, so a number of exporters has begun to prepare orders for the onion export market. Mr. Wang, sales manager at Jining Shangzhuo Co., Ltd., recently talked about current conditions in the onion export market.
According to Mr. Wang, the peak period of onion supply to the Shandong market is in full swing. And other onion production areas have begun to harvest their onions as well, including Feng county in Xuzhou, Jiangsu, and Tongxu county in Kaifeng, Henan. Last year the profit was mediocre, and some traders suffered significant financial loss. The risk is rather high, so traders with warehouse space are not that eager to stock their warehouses with onions this year.
“The current FOB price of peeled onions from Qingdao is around 650 USD per ton, which is much lower than in April. The price of 8cm yellow onions from Shandong is around 1-1.2 yuan [0.15-0.18 USD] per 0.5kg. The price of 8cm red onions is around 0.8-1.1 yuan [0.12-0.16 USD] per 0.5 kg. The main reason for the price decline is the start of the onion harvest in Yunnan, Sichuan, Jiangsu, Shandong, and Henan. Market supply is huge, and so the price drops,” said Mr. Wang. “But cheap onions have a competitive advantage in the international market. Chinese onion export virtually halted for more than a year, but more recently overseas buyers started to inquire after current prices.”
Gansu is one of the main onion production areas in China. The weather conditions and the soil conditions are both well suited for onion plantation. The onion production volume in Gansu is huge and the product quality is high. That is why Gansu onions are popular with overseas buyers. “The onion harvest in Gansu is expected to begin in late July, and the first supply is expected to enter the market in August. However, it is still too early to discuss the prices of Gansu onions. The price is determined by weather conditions, harvest conditions, overall surface area devoted to onion plantation, production volume, etc.”
“The product value of onions is not that high, so when the shipping fees began to rise last year, many onion exporters halted their operations. They exported small volumes of peeled onions to the UK, but that has stopped as well. The shipping cost was simply too high,” said Mr. Wang. “However, in March the shipping fees began to come down. The current shipping fee from Qingdao to Europe is around 8,500-9,000 USD per container. The shipping fees are expected to fall even further, but the product value of onions remains rather low, so it will take some time before onion export is profitable again.”
In addition to whole onions, Jining Shangzhuo Co., Ltd. also sells frozen diced onions, frozen onion slices, and frozen onion rings. “These products can be kept in the freezer for a long time, so their price is not susceptible to external factors. That is why we continued to export our frozen onion products.”
For more information:
Jining Shangzhuo Co., Ltd.