Onions are getting cheaper: declining demand and product quality are changing the market

Ukraine has seen a noticeable decrease in the price of onions, despite the fact that due to seasonal inventory reduction, the price usually tends to increase. This time, the situation is developing differently: the main factors influencing price dynamics have become the deterioration of product quality and weak demand from buyers.

Ukrainian farmers are currently selling onions at a price of 16 to 26 hryvnias per kilogram (equivalent to \.39–0.63/kg). Last week, the minimum price did not fall below 18 hryvnias per kilogram (\.43/kg). Thus, in just one week, wholesale prices fell by an average of 12%.

Interestingly, the current cost of onions is also about 12% lower than in the same period last year. Then prices remained at a higher level, despite similar seasonal trends. This year's decline is caused not only by economic factors, but also by consumers' objective assessment of the quality of the product.

Industry experts report that the quality of onions in storage is noticeably deteriorating. Storing products in improper conditions or staying in vegetable storage for too long leads to a loss of presentation, which reduces interest from both retailers and end consumers.

Against this background, purchasing activity remains low. Retail chains and wholesale buyers are in no hurry to replenish stocks, as they are afraid of losses due to rapid spoilage of products. This creates additional pressure on producers, forcing them to lower prices in order to attract buyers.

In general, the situation on the onion market in Ukraine is currently far from stable. Market participants do not rule out further reduction in product prices if the quality of the harvest continues to decline and demand does not increase. As a result, producers may suffer financial losses, and buyers may face a limited choice of quality products.