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Onion farmers laugh to the bank despite increased production costs

Despite the price of hybrid onion seeds doubling over the past year, onion growers are still laughing all the way to the bank as the price of the purple gold remains elevated across the country on limited supply. 

“Currently, the farmgate price of one kilogram of onions is as high as Sh140. At that price it doesn’t matter if I am paying 20K or 40K for a tin of seeds, I’ll be making money,” said Joshua Mutuku– an onion grower based in Meru.  

This high price has been driven by reduced local production, and a lack of supply from Tanzania which has been an important source of onions, complementing local supply.

Related News: Hybrid onion seed prices double on increased import costs & high demand

Related News: Why it is more profitable to sell onions immediately after harvest than store

Heavy rains have affected Kenya’s main sources of Tanzanian onions, Mang’ola, and Singida while a 23 per cent slump in the Kenyan Shilling against the Tanzanian Shilling has made importing from the country more expensive. 

Lastly, the imposition of trade barriers by the Tanzanian government in February of this year has also restricted access to her agricultural produce. 

Despite the harvesting of onions peaking in March of this year– which was expected to increase supply in local markets– the impact of the harvest on prices has been dampened by the high demand for onions both locally and within the East Africa Community (EAC) region, particularly Tanzania, Uganda, and South Sudan. 

Related News: Increased seedling sellers keeping tomato prices down

Interestingly, according to a produce off-taker for one of Kenya’s major agricultural aggregators, they are having trouble sourcing onions as large producers are exporting to Zambia. According to the Zambia Fruits and Vegetables Association, the country plans to import 3,500 tonnes of onions monthly to stem a shortage of the vegetable.

According to the CBK’s April 2024 survey, both farmers and agri-commodity buyers expect onion prices to remain elevated throughout April 2024.

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