the balance of exports and imports onions, scenario prices for the first half of 2014 (new)
1. 17 December, 2013
Development forecast of prices in Ukraine at 2014 season (two scenarios).
Prospects of evolution market of fresh and chilled onions in Ukraine.
Review export-import activity of countries which
typically produce & consumer the onion.
2. Area - Total 41,543 km2 (135th) 16,039 sq mi
Population - 2014 estimate 16,819,595
Netherlands
Area - Total 603,628 km2 (46th) 233,090 sq mi
Population - 2012 estimate 44,854,065
Ukraine
Netherlands 14.5 times less than Ukraine in
area and 2.65 times smaller in population.
List of countries by onion production
From Wikipedia, the free encyclopedia
This is a list of countries by onion production in 2008 mostly based on
FAOSTAT FAO accessed in August 2010. Production by country >400,000 t
Rank Country/Region
Onion production
(tonnes)
1 People's Republic of China 20817295
2 India 8178300
3 United States 3349170
4 Pakistan 2015200
5 Turkey 2007120
6 Iran 1849275
7 Egypt 1728417
8 Russia 1712500
9 Brazil 1299815
10 Mexico 1252441
11 Japan 1165000
12 Netherlands 1130000
13 Spain 1098400
14 Ukraine 1049200
15 South Korea 1035076
16 Bangladesh 889
17 Indonesia 824
18 Myanmar 740
19 Uzbekistan 728
20 Algeria 700
21 Argentina 700
22 Morocco 662
23 Peru 634
24 Nigeria 621
25 Poland 618
26 Germany 408
3. 2007 2008 2009 2010 2011 2012
Netherlands T 970167 1184508 1222307 1517522 1336441 1245456
2007 2008 2009 2010 2011 2012
Netherlands T 145050 138300 177061 165614 198846 166412
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting Countries Import Statistics (Partner Country: World)
Reporting
Country Unit
Quantity
• Net exporter.
• Increasing trend in exports (6 years).
• Stable trend in imports.
• Import occupies a niche of seasonal
onion of the next season & fresh crop.
• Minimum difference 825 117 t in 2007.
The average export 15 867 т per week.
• Maximum difference 1351908 t in 2010.
The average export 26 000 т per week.
• Ideal for creating a special system
exporters –operators (many small
producers).
• Optimally to build long-term
relationships in the chain:
growers - long-term storage -
packing - export.
• Ideal for long-term relations in the
system of «net packaged weight after
the sale“.
• Working model «effective 5 year cycle»
with a positive difference of value
added relative to the cost of growing.
• The state does not interfere in the
domestic market pricing, the political
situation is stable, stimulated the
growing, production good quality
package and export.
Onion import-export in Holland
min
max
4. Onion export – import in India & China
2007 2008 2009 2010 2011 2012
India T 899434 1546801 1830696 1364337 1080584 1619313
2007 2008 2009 2010 2011 2012
India T 104 89 444 5594 7111 450
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting Countries Export Statistics (Partner Country: World)
Reporting
Country Unit
Quantity
2007 2008 2009 2010 2011 2012
China T 645322 545043 525906 644596 742095 620113
2007 2008 2009 2010 2011 2012
China T 651 6117 2405 5043 353 141
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
• India & China net exporters.
• Increasing trend in exports (6 years).
• Stable trend in imports. Much more area and population then in Holland.
• Import occupies a niche offer seasonal onion of the next season & fresh crop (Similarly, as in the
Netherlands.).
• A huge population and political motives (consumer basket, inflation, other) make stimulate production in the
amount many times greater than their own consumption. For India in 2013 season possible another picture,
but this is an exception to the rules associated with weather factors.
Export Year China
Min diff, t 2009 523501
Max diff, t 2012 741742
Export Year India
Min diff, t 2007 899330
Max diff, t 2009 1830252
5. Onion import-export in Canada! & South Korea
• Canada & South Korea net importers.
• Increasing trend in imports only Canada (6 years).
2007 2008 2009 2010 2011 2012
Canada T 76169 77979 41598 58774 29963 38735
2007 2008 2009 2010 2011 2012
Canada T 154773 146366 162281 162039 178332 175595
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
2007 2008 2009 2010 2011 2012
South
Korea T 28463 37339 22727 18848 15590 42479
2007 2008 2009 2010 2011 2012
South
Korea T 1462 1 8900 3827 766 947
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Import Year Canada
Min diff, t 2008 65387
Max diff, t 2010 103265
Import South Korea
Min diff, t 2009 13827
Max diff, t 2012 41532
• Price chart repeats the tendency import graphics in Canada. Information received from http://www.agr.gc.ca
• Despite the rather low volume of imports (relative to the domestic production in the country) curves never
intersect.
6. • Net exporter.
• It has been a traditional supplier of
onions for Ukraine (and Russia) the last
20 years in certain periods (stable until
2007).
• It has worked as a "gate" for Ukraine
and Russia from Europe. Companies
imported onion from Holland, changed
invoices and sent to Russia and Ukraine
as a Polish onion. Very clearly seen in
the curves.
• Minimum difference 11424 t in 2010
(year of drought and high prices).
• Maximum difference 72392 t in 2009
(before the year of drought, start
swinging "pendulum«) .
Both the falling trend line. Two reasons:
- The country joined the European Union.
Manufacturer profitable show "complete"
the sale price for the VAT refund. The
emergence of the "new gate" - Latvia.
- After the 2008 financial crisis, late ,but
began to appear large projects for the
production of vegetables in Russia and
Ukraine. Poland's role began to diminish.
Onion export-import in Poland
2007 2008 2009 2010 2011 2012
Poland T 117844 143818 123295 118969 114988 122166
2007 2008 2009 2010 2011 2012
Poland T 82562 78769 50903 107545 89501 59384
Reporting
Country Unit
Quantity
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
7. • Net importer. But…. ???
• A trend line is falling rapidly. The last
peak imports fall on arid 2010.
• Minimum difference 224420 t in 2012.
(I am confident that 2013 will be even
less value).
• Maximum difference 615486 t in 2007
(Long enough, in 2010 reflected on the
curves, but did not change the direction
of the trend line.. ).
• Is It possible that some part of the
onion pass customs clearance?
Yes. But it's definitely part of it.
• Is it possible that invoice prices not
correspond to the real?
Sure. But we do not consider the price
of Russia. Only trends.
• Is this information important for Ukraine?
Sure. Ability to export from Russia to
Ukraine emerged today.
Curves intersect in the future. Perhaps in two years,
may be in three. Opportunities to invest in growing
vegetables and construction of storage facilities are
available in Russia. Last week information about the
new storage in Rostov on 36,000 tons of onions was
received three times.
Onion import-export in Russia.
2007 2008 2009 2010 2011 2012
Russia T 225 16269 43150 732 8628 355
2007 2008 2009 2010 2011 2012
Russia T 615711 457603 370802 576217 456600 224775
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
8. • Net exporter? Net importer? Who?
• The first country in the World, which
makes early prediction of volume
production and prices for onions and
enables each growers to participate in
«casino».
• First look says Ukraine as part of the
Soviet Union, which should consume
significant amounts of onions. There is
an opportunity to grow - grow all those
who have money and land.
Onion import/export in Ukraine.
2013* Information should be checked
2007 2008 2009 2010 2011 2012 2013*
Ukraine T 82 34829 10683 41825 22583 1382 781
2007 2008 2009 2010 2011 2012 2013*
Ukraine T 66159 2117 68213 1516 2489 19027 51000
Ukraine TOTAL (without forecast)
Reporting Countries Export Statistics (Partner Country: World)
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Import Year Ukraine
2008 32712
2010 40309
2011 20094
Diff
Export Year Ukraine
2007 66077
2009 57530
2012 17645
2013 50219
Diff
9. Analysis of export-import activity depending on prices
(actual information).
• For curve (next slide), I used information on the average price per
month.
• I use the average monthly price for EXW conditions on the mesh-bag 25
kg on pallets from the grower (packer) in the Kherson region.
• My goal - to determine the law of price changes, compared with the
dynamics of export-import, build a forecast for the next six months (a
year).
• Prior to the 2007 season - as a rule sold domestic production onion until
February, since February - import onions. Import quality is always higher
then Ukrainian quality . Since 2007 - the «pendulum» begins to swing.
• Price of the last three months created is artificially. No objective reasons
for a higher price than in the 2010 season (drought), except for one -
greed.
• I propose to consider two scenarios (9 and 10), which depend on the
actual volume of onion in long-term storage.
10. Onion years average price in Ukraine actual/import-export
activity.
Onion Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec UAH/kg
2005 1,57 1,82 2,62 1,46 1,00 0,94 1,22 1,59 1,75 1,16
2006 1,83 2,14 2,37 2,26 2,83 4,41 2,03 1,41 1,20 1,19 1,18 1,12 2,00
2007 1,06 1,21 1,39 1,38 1,68 2,75 3,37 1,60 1,36 1,35 1,49 2,01 1,72
2008 3,17 3,47 3,59 4,42 4,67 4,03 3,34 2,14 1,62 1,51 1,42 1,19 2,88
2009 1,16 1,19 1,13 0,99 0,99 1,12 1,59 1,64 1,89 2,64 2,87 2,90 1,67
2010 3,24 3,98 4,52 6,24 7,08 6,71 3,07 2,99 3,58 3,96 3,63 4,00 4,42
2011 4,52 5,37 5,55 6,17 7,47 7,50 1,81 1,11 1,01 1,05 1,20 1,01 3,65
2012 0,65 0,65 0,40 0,45 0,65 1,20 1,40 1,38 0,87 0,74 0,75 0,80 0,83
2013 1,00 1,00 1,64 1,74 4,00 4,00 5,40 2,00 3,50 4,00 4,00 5,80 3,17
the highest price in the world (last season - the lowest)
11. Forecast onions prices to 2014 (1 scenario, total deficit).
2014*FORECAST
2007 2008 2009 2010 2011 2012 2013* 2014*
Ukraine T 82 34829 10683 41825 22583 1382 781 36000
2007 2008 2009 2010 2011 2012 2013* 2014*
Ukraine T 66159 2117 68213 1516 2489 19027 51000 72000
Ukraine TOTAL(First scenario)
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Onion Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec UAH/kg
2005 1,57 1,82 2,62 1,46 1,00 0,94 1,22 1,59 1,75 1,16
2006 1,83 2,14 2,37 2,26 2,83 4,41 2,03 1,41 1,20 1,19 1,18 1,12 2,00
2007 1,06 1,21 1,39 1,38 1,68 2,75 3,37 1,60 1,36 1,35 1,49 2,01 1,72
2008 3,17 3,47 3,59 4,42 4,67 4,03 3,34 2,14 1,62 1,51 1,42 1,19 2,88
2009 1,16 1,19 1,13 0,99 0,99 1,12 1,59 1,64 1,89 2,64 2,87 2,90 1,67
2010 3,24 3,98 4,52 6,24 7,08 6,71 3,07 2,99 3,58 3,96 3,63 4,00 4,42
2011 4,52 5,37 5,55 6,17 7,47 7,50 1,81 1,11 1,01 1,05 1,20 1,01 3,65
2012 0,65 0,65 0,40 0,45 0,65 1,20 1,40 1,38 0,87 0,74 0,75 0,80 0,83
2013 1,00 1,00 1,64 1,74 4,00 4,00 5,40 2,00 3,50 4,00 4,00 6,30 3,22
2014 7,00 8,00 9,00 9,00 10,00 11,00 1,40 1,38 0,87 0,74 0,75 0,80 5,00
• Price continues to grow from month to month in all countries. Inventories are very small. The price of imported onion does
not regulate the price of the domestic market. The situation is worse than the drought of 2010. Be able to import «only»
20,000 tons at the beginning of the year.
• Growing onion become even more attractive business for «smart» people and in season 2014 ALL begin to grow onions.
• By year end, the lowest price will provide an opportunity to export up to 72,000 tons (if there are means to collect and pack).
Government is happy - back low prices, exports are growing, the budget is filled.
• Probability of this scenario (my opinion) - not more than 20%. If in January will be prolonged frosts over - 12-15⁰ Celsius - the
probability will rise considerably. (or India buy a large amount of onions in Europe?).
• Very favorable for companies that sell seeds.
12. Forecast onions prices to 2014 (2 scenario, postponed proposal).
2014* FORECAST
2007 2008 2009 2010 2011 2012 2013* 2014*
Ukraine T 82 34829 10683 41825 22583 1382 781 30000
2007 2008 2009 2010 2011 2012 2013* 2014*
Ukraine T 66159 2117 68213 1516 2489 19027 51000 30000
Reporting Countries Import Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Ukraine TOTAL (second scenario)
Annual Series: 2007 - 2012
Reporting
Country Unit
Quantity
Reporting Countries Export Statistics (Partner Country: World)
Commodity: 070310, Onions And Shallots, Fresh Or Chilled
Onion Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec UAH/kg
2005 1,57 1,82 2,62 1,46 1,00 0,94 1,22 1,59 1,75 1,16
2006 1,83 2,14 2,37 2,26 2,83 4,41 2,03 1,41 1,20 1,19 1,18 1,12 2,00
2007 1,06 1,21 1,39 1,38 1,68 2,75 3,37 1,60 1,36 1,35 1,49 2,01 1,72
2008 3,17 3,47 3,59 4,42 4,67 4,03 3,34 2,14 1,62 1,51 1,42 1,19 2,88
2009 1,16 1,19 1,13 0,99 0,99 1,12 1,59 1,64 1,89 2,64 2,87 2,90 1,67
2010 3,24 3,98 4,52 6,24 7,08 6,71 3,07 2,99 3,58 3,96 3,63 4,00 4,42
2011 4,52 5,37 5,55 6,17 7,47 7,50 1,81 1,11 1,01 1,05 1,20 1,01 3,65
2012 0,65 0,65 0,40 0,45 0,65 1,20 1,40 1,38 0,87 0,74 0,75 0,80 0,83
2013 1,00 1,00 1,64 1,74 4,00 4,00 5,40 2,00 3,50 4,00 4,00 6,30 3,22
2014 5,00 4,80 4,80 5,00 5,20 5,60 1,40 1,38 0,87 0,74 0,75 0,80 3,03
• Volumes in the storage onion underestimated. Highest price in December and January.
• February, March and April - the price decreases (the first signs have already appeared).
• With the increasing cost of storing the most profitable for growers are December and January.
• Sell need right now.
• Despite the expected price decline attention to the onions grow anyway and ..... repeated in 2012. Low prices.
• Long live EXPORT!
• Probability of this scenario (my opinion) - more than 80%. If you enter the market with a great offer - the price can quickly
collapse. If it does not make "Green Team" - someone else will do.
• Again it is very favorable for companies that sell seeds.
• If you add the growth of the dollar - the profit decline at all and about 8.3 UAH 1 USD will remain a sweet memory.
13. Basic results of the analysis of import and export activity in Ukraine
2007-2013 year
• In any case, the completion in 2014 - growth of volume growing, no fixed role of Ukraine (net exporter or a net
importer) and ... very low prices (repeat of the 2012 season) with an increase in administrative pressure
before the elections in 2015.
• Substantial cash loss will come next year for all participants onion market (growers, storage,
packers, wholesalers, retailers) due to constant pressure on the price and the low base for gross
profit.
• The impact of political factors on the export market (the EU ore Customs Union), opening date
"export window».
• Slow concentration in production will occur in the most efficient producers, who can get the
highest yield at a relatively high quality ( & low cost).
Canadian «surprise»
• Net importer Canada - a big surprise for me! Leading the search for onion harvesting system with "green
neck" for long-term storage, I stumbled to the video: http://www.youtube.com/watch?v=80_tuNHqxWg &
http://www.youtube.com/watch?v=XbUSkF91Rkw (I highly recommend to look!).
• I do not believe that Canadian farmers can not grow (and store) the amount of onions, sufficient (or excess)
for their own consumption.
• I do not have contacts in Canada, I do not know specifics of its policy of the Agrarian Ministry and the specific
price formation in the market. At the moment I can not get reliable information on these matters.
• My assumption - after a sharp decline in average prices in 2008 (twice - not four times, as in Ukraine) certain
system actions allowed Canada to regulate the production for the domestic market and increase the average
annual price. Past four years, the price became stable and sufficient to provide added value for growers
(warehousing, packers). Consumption deficit is compensated by imports.
• This issue requires further in-depth study.
14. Probable strategic development of the company as a growers
of onions in Ukraine.
• Cost of growing (onion lies in store)
• 1 - the average cost in the south of
Ukraine (including drip irrigation)
• 2 - average cost efficient economy in
the south of Ukraine (including drip
irrigation)
• 3 - for the cost of the necessary value
added (there are examples in the
central part of Ukraine on the upper
watering).
• Stable operation for at least 5 years
with a constant accumulation of
positive experiences and decrease the
cost of growing - the path to a
successful enterprise.
• «Dutch scenario» (consolidation of uniform packaged products and
successful sale) can not be implemented in Ukraine (undefined role -
the importer or exporter?).
• Only its own efficient farm with full process and cost management
can fill their own long-term storage and will be able to generate
added value.
• In any other case - growers will dictate pricing conditions in the
domestic market. Domestic market price determines the possibilities
for export activity.
• Reduced consumer ability, political games, conservative way of mind
does not allow retailers to fully realize the concept of quality Q1, Q2,
Q3.
• Concentration production in a limited range of efficient farms use
control mechanisms growing volumes (Canada Way?) - possibility
of strategic development onion market.
15. Analysis of the annual average contribution margin, depending on the
source model (using ISO curves onion 2013-2014, annex 3)
100,5% 38,0%
• Contribution margin 38% - (See Annex 4) - quite risky to achieve strategic
results for the period of 5-8 years
• Contribution margin 100,5% - (See Annex 5) - the most successful way to
develop a profitable enterprise in the future the next 5-8 years