Onion Market Faces Price Squeeze as Arrivals Surge and Supply Glut Builds

The onion market has endured a sharp correction this week as abundant arrivals flooded key agricultural hubs, leading to a notable drop in prices across all quality grades. With farmers expediting post-harvest clearances amidst storage concerns, onion prices slid dramatically compared to recent weeks. This sudden surge in fresh supply—unaccompanied by any significant demand shock or export openings—pushed bulk trading prices down to $0.23–$0.29 per kg, a marked decline from prior peaks.

Weak market sentiment has gripped traders and wholesalers, with many keeping a wary eye on incoming loads and the looming volatility tethered to unpredictable arrivals. Current trends point toward a continued soft pricing environment unless weather or logistical factors curb the inflow. Given the absence of major demand rebounds and steady domestic consumption, the market outlook leans bearish for the near term, making adaptive strategies crucial for both producers and buyers.

📈 Prices & Latest Data

Product	Type	Origin	Location	Delivery	Latest Price (EUR)	Previous Price	Updated	Market Sentiment
Onion powder	Grade B	IN	New Delhi	FOB	1.32	1.30	2025-07-19	Neutral/Firm
Onion powder	White	IN	New Delhi	FOB	1.59	1.57	2025-07-19	Neutral/Firm
Onion	Powder (Organic)	IN	New Delhi	FOB	2.67	2.65	2025-07-19	Neutral/Firm
Onion	Fresh	EG	Kairo	FOB	0.80	0.79	2025-07-19	Slightly Bearish
Onion	Flakes (Organic)	IN	New Delhi	FOB	5.14	5.12	2025-07-19	Neutral
Onions fried	Crispy fried	PL	Lodz	FCA	3.42	3.42	2025-07-16	Stable

Spot Market (USD): High-grade: $0.29/kg, Mid-grade: $0.26/kg, Low-grade: $0.23/kg (down $0.05–0.07 week-on-week)

🌍 Supply & Demand

• Arrivals: Substantial increases in arrivals, especially of post-harvest onions, have driven the price correction in the spot market.
• Demand: Domestic consumption remains steady; retailers report no significant surge or slump.
• Exports: No new export triggers observed, keeping additional upward price momentum absent.
• Other States: While other supply regions see similar trends, the current region faced a steeper drop, suggesting local factors at play.

📊 Fundamentals & Market Drivers

• USDA/Acreage: While onions are not a major USDA crop, local government and agriculture department reports confirm expanded acreage and early post-harvest market participation.
• Stock Levels: Farmers are clearing stored stock, increasing near-term supply overhang and exacerbating price declines.
• Speculative Positioning: Minimal, as the onion market is largely physical/spot traded rather than futures or derivatives-based.
• Historical Context: Last season’s post-harvest surge also triggered a temporary supply glut but stabilized as arrivals tapered off.

⛅ Weather Outlook & Impact

• Current Conditions: Key Indian and Egyptian growing regions report seasonal monsoon activity with short dry spells—optimal for current harvest but could hinder storage and logistics near term.
• Forecast: Scattered moderate rainfall expected in major Indian states (Maharashtra, Karnataka) over the next week. No severe weather disruptions anticipated, but humidity may impact shelf life and increase farmer urgency to dispatch stocks.
• Potential Effects: Continued favorable weather supports high arrivals. Any sudden shift (excess rain or transport delays) could slow supplies and offer price relief.

🌏 Global Production & Stocks

Country	2024 Production (MT)	Stock Position	Export
India	27.5m	High/Seasonal	Moderate
China	23.2m	Stable	High
Egypt	3.3m	Moderate	Firm
EU	7.8m	Low	Modest

Note: India’s stocks are currently elevated due to aggressive post-harvest clearance.

📆 Trading Outlook & Recommendations

• Expect weak prices to prevail until arrivals slow or stocks clear significantly.
• Buyers: Take advantage of supply-driven price dips for near-term inventory buildup.
• Farmers/Exporters: Consider storage only if local weather allows and logistics risk is low. Otherwise, accelerate sales to avoid storage losses.
• Traders: Monitor weather and logistics updates closely; sudden supply delays could create short-term bounces.
• Risk: Further price declines possible if arrivals continue at current levels without major export or weather disruptions.

🔮 3-Day Regional Price Forecast

Market	Product	Current Price	3-Day Forecast	Trend
New Delhi	Onion powder (B)	EUR 1.32/kg	EUR 1.31–1.33/kg	Steady-Slightly Soft
New Delhi	Onion powder (white)	EUR 1.59/kg	EUR 1.58–1.60/kg	Stable
Regional Mandi (Spot)	Fresh onion (high grade)	USD 0.29/kg	USD 0.27–0.30/kg	Bearish

Volatility expected to persist. Watch for daily weather and logistics reports for possible trend reversals.