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Explained: Why onions are making the Philippines cry

Firstpost logo Firstpost 28-01-2023 FP Explainers

Onion is costlier than meat in the Philippines. Amid shortage and skyrocketing prices, restaurants have cut back on the usage of this staple ingredient of Filipino cuisine.

The Philippines consumes around 17,000 metric tons of onions a month, noted NPR.

Onion is being smuggled into the country and some have likened the soaring prices to that of “gold”.

Earlier this month, the Philippines’ Bureau of Customs seized over 153 million pesos (US$2.8 million) worth of red and white onions smuggled from China, reported South China Morning Post. 

How onion has become a luxury in the Southeast Asian country was visible when a picture of a bride with a bouquet of onions on her wedding day went viral.

This comes as the country clocked a record 14-year-high inflation last month with onions accounting for 0.3 percentage points of the 8.1 per cent rise in consumer prices, National Statistician Dennis Mapa said earlier in January, as per Time magazine.

President Ferdinand Marcos Jr has called the rising food prices “an emergency situation”.

Earlier, Marcos approved the import of 21,060 metric tonnes of red and yellow onions, with the first shipment coming this week.

What are the prices of onions in the Philippines and what led to this crisis? Let’s take a closer look.

Onion crisis

The price of onions touched 700 pesos (Rs 1047 approximately) per kg last month, BBC reported citing official data.

This is more than the country’s daily minimum wage which is around 533-570 pesos (Rs 797-852).

While prices have dipped recently but a kilogram of onion still costs more than an entire chicken, as per The Guardian.

“The rise in onion prices has been unprecedented,” Professor Leonardo Lanzona, of Ateneo de Manila University, told The Guardian.

Besides onion, the rate of eggs has also increased and the country is also facing a crunch of sugar.

onion Philippines © Provided by Firstpost onion Philippines

Congress is probing how the prices have doubled in a matter of months.

“Before it was sugar, now, it’s onions. We’ll end up having a hearing for everything in the kitchen,” Senator Grace Poe said at a senate hearing earlier, as per The Guardian.

Another politician has blamed cartels for manipulating prices.

“[At] the end of the day, if we cannot explain price movements, then the only answer is cartels,” Representative Stella Quimbo, an economist, told a House of Representatives Committee hearing on Wednesday (25 January), as per The Telegraph.

The crisis has fanned troubles for Marcos, who is also the agriculture secretary, with some lawmakers asking him to choose a replacement, reported BBC.

ALSO READ: Philippines to appeal ICC resumption of drug war probe

Why onion has become a luxury?

It can be due to a number of reasons.

Global inflation spurred by multiple causes including the Russia-Ukraine war, climate change triggering natural disasters, lack of cold storage and supply chain problems can be some of the reasons for the situation.

The business sector has put the onus on the agriculture department for failing to make “accurate supply projections” despite shortage warnings of onions and garlic in August last year, Time reported.

“Back in August, the Department of Agriculture had forecast a potential shortage of the root crop. A few months later, the Philippines was hit by two powerful storms that caused substantial crop damage,” Nicholas Mapa, a senior economist at ING Bank, was quoted as saying by BBC.

“We have also seen a stark pickup in demand as the economy recovers sharply,” Mapa added.

While agriculture officials believe a criminal syndicate hoarded onions affecting supply and triggering eye-watering prices.

onion prices in the Philippines © Provided by Firstpost onion prices in the Philippines

Natural disasters may have also contributed to the present crisis.

“Despite the lack of official statistics on onion production for 2022, the onslaught of Typhoon Karding, with … Noru in Nueva Ecija … most likely reduced local production,” Professor Bates Bathan of the University of the Philippines Los Baños, told The Guardian.

A group of farmers’ representatives has alleged that the prices of onions at Manila’s markets are much higher than what farmers are getting paid for them, The Guardian reported citing Rappler news site.

Farmers’ groups have also expressed concerns about imported items hurting their sales. However, the Department of Agriculture has assured that imports will be limited to minimise the effect on the local farmers.

Leonardo Lanzona, an economics professor at Ateneo de Manila University, has blamed the government neglect and manipulation of prices by middlemen, not a shortage of onions, for the situation.

He told The Telegraph, “the presence of hoarders and large merchants who may be in collusion with one another” led to an uptick in prices.

The prices may stabilise in the coming future as the imports arrive.

“Prices may actually drop dramatically once both harvest and imports hit the market almost simultaneously,” Mapa told BBC.

With inputs from agencies

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