As wholesale onion prices fell more than 25% from a year earlier, the government moved to stabilize supply and demand by diverting reserve stocks overseas.
On Feb. 4, the Ministry of Agriculture, Food and Rural Affairs said it will export 15,000 tons of government-purchased reserve onions to Vietnam, Taiwan and Japan to restore wholesale prices and stabilize supply in producing areas. The move is intended to isolate from the market the volume that could spur price declines if released.
Typically, the price of stored onions tends to rise from January to March before new onions ship, but this year prices fell instead as inventory grew, consumption slowed and lower-grade volumes were shipped. As of the end of January, the wholesale price of onions was 1,022 won per kilogram, about 27% lower than a year earlier.
The ministry said that if the price slump persists, pre-harvest onion transactions in producing areas could decline and the spring supply of new onions could be disrupted, and it moved to manage short-term supply and demand. Of the 25,000 tons of government reserves, the remaining 9,600 tons excluding export volumes will be released only in a limited manner if supply instability such as a sharp price rise occurs after new onions begin shipping in late March.
Measures to boost consumption will run in parallel. In February, the government will support onion discounts mainly at large and small supermarkets and traditional markets, and in March it plans additional promotions and planned discount events for domestic onions in connection with NongHyup and producer-funded programs.
At the same time, sorting and quality control for onions listed on wholesale markets will be strengthened. Through distribution agreements between NongHyup and producer groups, the plan is to reduce indiscriminate shipments of low-marketability volumes and block factors that drive prices down.
A ministry official said, "This onion supply and demand management plan is a preemptive measure not only for short-term price response but for overall supply and demand stability this year," adding, "We will review producing areas and market conditions even amid declining prices."