The cabinet decided to halt the export of onions for three months this week, concluding at the end of this year, in a bid to regulate onion prices in Egypt, Ahmed Abdel-Hafez reports.

The decision, announced earlier this week, followed a two-week surge in onion prices. In the wholesale market, the price per kg of onions was earlier LE18 to LE19, but during the third week of September market prices ranged from LE25 to LE35 per kg.

According to the cabinet’s Information and Decision Support Centre, onion prices in Egypt have increased by 516 per cent over the past year. The highest prices per kg were LE33 in Qena and LE30 in the Daqahliya and Qalioubiya governorates. The lowest prices were in the Gharbiya governorate at LE20 and in Beni Sweif and Assiut at LE21 per kg.

The cabinet’s decision was made on the basis of a recommendation from the Vegetables and Fruit Division of the General Federation of Chambers of Commerce, which submitted a memorandum urging a temporary halt to onion exports until prices stabilise in the local market.

The government responded by suspending onion exports until the end of December.

The prices of food commodities across the board have been seeing large increases, with food and beverage inflation surpassing 71 per cent year-on-year in August. Overall annual inflation jumped to 37.4 per cent compared to 36.5 in July.

Hatem Al-Naguib, deputy head of the Vegetables Division at the General Federation of Chambers of Commerce, attributes the surge in local onion prices to reasons including a decrease in the cultivated area of onions during the 2023 season as a result of the reluctance of farmers to grow them because of the risk of oversupply and low procurement prices.

There has been a notable increase in Egyptian onion exports this year, estimated at an additional 150,000 tons, due to a decline in India’s onion exports and translating into higher demand for Egyptian onions to compensate for the shortage in the markets.

A third factor has been a shift in the consumption patterns of many Egyptian families, which have moved away from stockpiling long-lasting goods, including onions, a practice that had been prevalent since the initial Covid-19 lockdown in early 2020 when prices began to rise.

Demand for many goods has shifted to a daily rather than a seasonal basis. This is in contrast to previous habits, when many families would purchase large quantities of storable goods and enough to last them throughout a season spanning three or four months, Naguib said.

While demand traditionally surges with the new harvest season, which typically witnesses an abundance of supply, the present economic crisis has also diminished the practice of stockpiling.

Onions are cultivated twice a year in Egypt in August and September in Upper Egypt and in October and November in Lower Egypt. The onion crop is harvested during the months of April, May, and June each year, said Abdel-Meguid Mubarak, head of the Onions Department at the Agricultural Research Centre in Cairo.

Mubarak said that the onions cultivated in mid-September are expected to lead to a significant decrease in prices by the end of October.

He said that Egypt has achieved self-sufficiency in onion production and has a surplus for export. Egypt’s onion production stands at 2.9 million tons, cultivated on over 195,000 feddans, he added.

Hussein Abu Saddam, chairman of the Farmers Syndicate, believes that the government’s decision to halt onion exports may not have the immediate impact that many anticipate.

He said that the decision was made relatively late since the export season typically starts in August and concludes by the end of September.

He expects that prices will begin to decline by the end of October, but this decline may not be substantial due to the lack of interest among farmers in cultivating onions.

“Towards the end of the season last year, some farmers faced the alarming situation of having to sell a ton of onions for as low as LE1,000, resulting in substantial losses,” he said.

* A version of this article appears in print in the 28 September, 2023 edition of Al-Ahram Weekly