The how and why of onion price drop in China

The cultivation range of onions in China is very extensive. Wherever you go, from North to South, everyone's growing onions. But the onion market situation is bad this year. Prices have been low all month and threaten to drop below production and operation costs for cultivators and storage traders. 


Why do onion prices fall? Because supply outstrips demand! Places, like Gansu, Inner Mongolia and other regions, have recently invested heavily in onion production. Cultivation in these two areas alone expanded by 15% to 20% compared to last year. The situation of the onion price in the last period looks even more bleak now. 
Reduced export volumes are also keeping onion prices low. Chinese onions are mostly exported to South-East Asian countries. Malaysia and Indonesia were the main importers of China's red onions in the last couple of years. But, due to an abundant onion harvest in India this year, their domestic market is now way oversupplied and South-East Asian countries all turned to India for cheaper onions. From January to July 2016, the export volume of Chinese onions was 265,600 tons compared to 290,000 tons at the same point last year - a relative decrease of about 8.4%. 
And it looks like nothing will change in the near term. Experts are gloomy - Gansu and Inner Mongolian onions are coming to market and the Heilongjiang onions harvest started in mid August. All in all, it looks like onion prices have nowhere to go but down.
Source: (Taiyuan)