Onion glut prompts government to expand stockpiling by 82%, halt some shipments

Output forecast to exceed average by 41,000 tons; stockpile purchases expanded by 20,000 tons; shipment suspensions and discount support to run in parallel as government vows to boost competitiveness of domestic onions

The government plans to sharply expand its stockpile purchases of mid-to-late season onions and pair the move with production-area shipment suspensions and consumption-boosting measures to stabilize prices amid an anticipated supply glut.

The Ministry of Agriculture, Food and Rural Affairs announced Wednesday it would pursue supply-and-demand stabilization measures — including expanded stockpile purchases — as this year's mid-to-late season onion output is forecast to exceed the average.

According to crop monitoring by the Korea Rural Economic Institute, the cultivated area for mid-to-late season onions this year stands at 14,148 hectares, down 7.4 percent from the average. However, yield per 10 ares has risen 12.2 percent to 7,690 kilograms, pushing projected total output to 1.088 million tons — 41,000 tons above the average.

To prevent a flood of onions hitting the market at harvest time and to guard against supply shortages in the lean season ahead, the government will expand its stockpile purchases to 20,000 tons, an 82 percent increase over the average. The stockpiled supply will be released to the market as conditions warrant.

NH Nonghyup Economic Holdings will also provide interest-free financing to help agricultural cooperatives in major production areas expand their own purchases.

The government and local governments in key production regions will also suspend shipments from some oversupplied areas. The measure covers 223 hectares, or about 1.6 percent of total cultivated land.

Onion producer organizations will lead a campaign urging growers to hold back low-grade onions from the market.

Consumption-promotion efforts will run alongside the supply measures. The ministry will use its YouTube channel to raise awareness and work with the Korean Dietetic Association to expand onion use in public cafeterias. Discount support at hypermarkets, small and mid-size supermarkets, and traditional markets will also be extended — discounts of up to 40 percent, originally set to end in late May, will now continue through early June.

The ministry also said it would press ahead without delay with measures announced last month, including export support for 10,000 tons and delayed-shipment arrangements for 5,000 tons.

Beyond short-term supply management, the government will work to strengthen the quality competitiveness of domestic onions. It plans to support the production of superior varieties, advance cultivation technology and improve storage methods to address the recurring cycle of supply instability.

Seo Jun-han, the ministry's director general for retail and consumption policy, said the government would work closely with local governments in major production areas, agricultural cooperatives and producer organizations to ensure the measures are implemented swiftly. "We will not only push forward with short-term supply measures but also develop ways to improve the quality competitiveness of domestically grown onions," he said.

adastra@heraldcorp.com