How will Saudi Arabia’s ban on import of Egyptian onions affect onion markets in Ukraine, Russia and EU?
In the second half of January, Saudi Arabia imposed a ban on import of Egyptian onions after the analysis of onion samples from Egypt proved to contain pesticide residues at a rate exceeding the allowed limit. Despite the Egyptian government’s claims of no formal notices, Saudi Arabia stopped importing onions from Egypt since January 18, according to EastFruit.
However, the problem is not solved, and Egypt needs to search for an alternative to the Saudi market. Besides a negative impact on prices in the domestic market, the ban affected reputation of Egyptian onions, and now Egyptian produce will be checked more carefully.
Market participants admit that problems with pesticide residue levels really happen. Saudi Arabia is the largest export market for onions from Egypt, with annual imports exceeding 200,000 tons.
Russia is the second largest market, where Egypt exports about 70,000 tons of onions a year. Egypt exports another 50,000 tons of onions to the UAE. Taking into account shortage of onions in the EU, an increase in exports of Egyptian onions to the Netherlands, the UK and other countries of the region was quite possible. Usually exports of Egyptian onions to those countries peak in April-March. However, in view of Saudi Arabia’s ban, a large part of products might be available for export to the EU earlier than usual, if suppliers manage to prove safety of products.
A probable increase in Egyptian exports to the EU may improve a tense situation in the European onion market, where now prices are record high. In fact, Egypt has faced a monthly volume of excessive 50,000 tons of onions, not to speak of new crop, which is to be available soon.
As a reminder, Egypt is the fourth largest onion`s exporter in the world after India, the Netherlands and China.
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