September 23, 2020: The prices of Indian onions are out of control. Why did they rise? The onion is an essential product in the Indian kitchen. The price of this product normally follows the relationship between supply and demand. That is why the price is now rising, because flooding and drought severely reduced the onion production volume in India. The price is now higher than 2.80 USD per kg. The Indian government has therefore implemented a prohibition on onion export, to keep the supply volume in the domestic market as high as possible.
How does this prohibition affect the price of Chinese onions? The answer is, it does not. First, the onion is not an essential product in the Chinese kitchen. Chinese market demand for onions is limited. Second, China is an onion exporter. The country exports large volumes of onions to Korea, Pakistan, and Bangladesh. The diet in Pakistan and Bangladesh, in particular, resembles that of India. They have a high demand for onions. Last year, India also implemented a prohibition on onion exports and Pakistan and Bangladesh rushed to import onions from China instead.
Domestic sales of Chinese onions are quite small. The market conditions are not great either. The Indian prohibition on onion export, however, creates commercial opportunities for Chinese onion exporters.
Source: Fresh Plaza
