MARKET ANALYSIS REPORT NO 1 OF 2015: ONION

Transcription

1 MARKET ANALYSIS REPORT NO 1 OF 215: ONION 1. INTRODUCTION The purpose of this text is to analyze the onion marketing environment. This analysis will be updated on a quarterly basis. The interval covered in the current issue is from October 213 to December 2. The period is subdivided into five, three months long quarters. The main issues discussed in the review are the trends in production, pricing, sales in the national fresh produce markets, exports, imports, growth and volatility. 2. PRODUCTION TRENDS Figure 1 below, illustrates quarterly production volumes and gross value of onions. Figure 1 indicates that onion production volumes were tons in quarter 4 of 2. Onion volumes have dropped by.3%, in comparison to the production volumes in quarter 3 of 2. The production volumes have gone up by 19.3% when compared to the production volumes at same quarter in the previous season (quarter 4, 213). Onion production output was stable above 153 tons except for quarter 4, 213 where volumes dropped to during the period under review. The quarterly production value of onions was R in quarter 4 of 2, which was 28% below, when compared to the quarterly production value in the previous quarter (quarter 3, 2) and the value has decreased by 1.9%, in comparison to the quarterly production value at the corresponding season (quarter 4, 213). Onion gross value eased lower in quarter 4 of 2, and this can be attributed to decline in the production volume and lower producer prices that occurred in the same quarter. 1

2 Rand /ton Tons Rand Figure 1: Quarterly production of onions Quarters Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 Volumes (Ton) Gross Value (Rand) Source: Statistics and Economic Analysis, DAFF 3. PRICING TRENDS Figure 2 illustrates the quarterly producer prices of onion for the period under review. The quarterly producer price of onions was R tons in quarter 4 of 2. The quarterly price has dropped by 28.2%, when compared to the quarterly producer price in the previous quarter (quarter 3 of 2) and the price has decreased by 17.7%, in comparison to the quarterly price at the same time in the previous season (quarter 4, 213). The onion prices eased lower in quarter 4 of 2, despite a.3% reduction in production output and this can be attributed to poor onion uptake in the same quarter. Figure 2 : Quarterly producer prices of onion Quarters Price (Rand/ton) Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 R R R R R Source: Statistics and Economic Analysis, DAFF 2

3 Tons Rand /ton 4. MONTHLY SALES OF ONION AT NATIONAL FRESH PRODUCE MARKETS Figure 3 below show monthly volumes and prices of onions at national fresh produce markets. Monthly onion volumes at national fresh produce markets were 32 8 tons in December 2, which was 7.9% above, when compared to monthly volume of November 2 and has notably increased by 57.6%, when compared to the monthly volume at the same time in the previous season (December 213). Onion volumes were stable above 31 tons in both October 213 and 2. Monthly price at national fresh produce markets for onions was R2 33/ton in December 2. The price of onion has gone up by 17%, when compared to the November 2 price. The monthly price has decreased by.5%, in comparison to the monthly price at the same month in the previous season (December 213). Monthly price eased lower in November 2, despite a 4.9% decline in volumes supplied across the markets during the same month and this can be attributed to weak demand of onion in the same month. Figure 3: Monthly sales of onions at national fresh produce markets Months Oct 13 Nov 13 Dec 13 Jan Feb Mar Volume ( tons) Price (Rand/ton) Apr May Jun Jul Aug Sep Oct Nov Dec R 6 R 5 R 4 R 3 R 2 R 1 R Source: Statistics and Economic Analysis, DAFF 5. Quarterly onion exports Figure 4 below illustrates quarterly export volumes and export values of onions. Quarterly export volume of onions was tons in quarter 4 of 2, which was 21.6% below, the quarterly export volume in the previous quarter (quarter 3 of 2) and the export volumes have gone up by 16.3%, when compared to the quarterly export volume at the same time in the previous season (quarter 4, 213). In quarter 4 of 2, export volumes eased lower, which can be assigned to a.3% drop in domestic production output in the same quarter. 3

4 Volume (tons) Value (Rand) The quarterly export value of onions was R in quarter 4 of 2 which was 38.3% below the quarterly export value in the previous quarter (quarter 3, 2) and the value has increased by 16.9% compared to the export value at the same time in the previous season (quarter 4, 213). Figure 4 illustrates that, it was more profitable to export onions in quarter 4 of 2, when compared to quarter 4 of 213, since higher export values were recorded for volumes exported Figure 4: Quarterly onion exports Quarters Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 Volume (tons) Value (Rands) Source: Quantec Easy data 6. Quarterly onion imports Figure 5 below illustrates quarterly import volumes and import values of onions. Quarterly import volume of onions was tons in quarter 4 of 2. The import has surged by 229%, when compared to the quarterly import volume in the previous quarter (quarter 3 of 2) and the import volumes have decreased by 24%, when compared to the quarterly import volume at the same time in the previous season (quarter 4, 213). Onion imports eased higher during quarter 4 of 2 and this can be attributed to a.3 % fall in domestic production. The quarterly import value of onions was R in quarter 4 of 2. Import value has increased by 96%, when compared to the quarterly import value in the previous quarter (quarter 3, 2) and the value has decreased by 38.7% compared to the import value at the same time in the previous season (quarter 4, 213). Figure 5 illustrates that, it was cheaper to import onions in quarter 4 of 2, when compared to quarter 4 of 2. 4

5 Volume (tons) Value (Rand) Figure 5: Quartely onion imports Quarters Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 Volume (tons) Value (Rand) Source: Quantec Easy data 7. GROWTH, VOLATILITY & STABILITY ANALYSIS The onion industry growth rate was calculated from regression analysis results. The volatility and stability measures were determined by calculating the coefficient of variation for the various onion industry statistical series. The formula for the coefficient of variation is as follows: V x i N where: V = Coefficient of Variation = Standard deviation = mean = observation in quarter i x i N = Number of quarters The outcomes of these growth and volatility calculations are presented in Table 6. They are calculated using quarterly statistics and covered the same five-quarter period under review beginning in October 213 and ending in December 2.. 5

6 Table 6: Onion industry Growth Rates and Coefficients of Variation (October 213 December 2) Category Subcategory Growth Rate (%) Coefficient of Variation Production Volume 3.8%.76 Gross Value of Production Value -1.6%.315 Producer Prices Value -5.5%.274 Export Volume 2.7%.487 Export Value -3.5%.674 Import Volume.5%.85 Import Value -1.7%.68 Source: Calculated from Statistics and Economic Analysis Data As shown in Table 6, all variables had coefficients of variation that were less than 1, indicating low levels of volatility throughout the period under review. The low volatility indicates that the onion industry has displayed minimum changes during the five quarter period. Onion industry has experienced positive growth in terms of production volume, export volume and import volume. The industry has experienced negative growth in terms of gross value of production, export value and import value. 6

7 8. Acknowledgements Acknowledgement is given to the following information sources: 8.1 Directorate: Statistics and Economic Analysis Quantec Easy Data For more information, contact: Director: Marketing Department of Agriculture, Forestry and Fisheries Private Bag X 15 Arcadia 7 Tel: (12) Fax: (12) MogalaM@daff.gov.za Website: http//. Deputy Director: Commodity Marketing Tel: (12) Fax: (12) ElvisNak@daff.gov.za Horticulture (Vegetables): Senior Agricultural Economist Tel: (12) Fax: (12) NdinannyiM@daff.gov.za A disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purposes of detailing the onion industry. Anyone who uses this information does so at his/her own risk. The views expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to the industry, unless otherwise stated. The Department of Agriculture, Forestry and Fisheries therefore, accepts no liability for losses incurred resulting from the use of this information. 7