Australian onions export market intelligence (VN20004)

What was it all about?

In 2022, this short investment provided the Australian onion industry with a deeper understanding of key global markets to inform future market entry or expansion strategies. The project included the development of a five-year sector export strategy alongside the 2021 Australian Onion Mapping Report and the Australian Onion Industry Situation Analysis & Export Strategy Report (2021-26).

The Australian onion industry wishes to increase exports to reduce pressure on the domestic market, grow market share, diversify risk and tap into new markets. The expansion of high-value export opportunities is critical to the industry's long-term success, with a goal of exporting 30 per cent of total production by 2030.

The report identified opportunities for Australian onion exporters to target premium markets. It was found that Australian growers may struggle to compete based on price, with cheaper commodity onions produced in markets such as India and China. With high production and freight costs, this is likely to remain the case for Australian exporters. The recommendation for onion exporters is to identify markets with distribution channels where consumers are willing to pay a premium price.

Several key considerations for Australian onion growers seeking to access export market opportunities were identified, including that:

• Establishing sustainable trade opportunities for Australian onion growers will require a focus on high-value market channels to reduce the reliance on low-value spot markets
• Increased purchasing power in export markets may create future opportunities
• Modern retail channels present limited opportunities for Australian onion exporters in some markets. However, the emergence of premium supermarket chains may create opportunities.
• Supply chain inefficiencies and trade barriers may limit export trade, particularly in developing South-east Asian markets, as the product quality may deteriorate before it reaches the consumer.

Several barriers may limit the expansion of trade opportunities for Australian onion growers. These must be resolved to ensure the long-term success of trade initiatives, and include:

• Supply chain uncertainty
• Insufficient supply chain infrastructure
• Administrative burden on growers/exporters
• Difficulties finding alternative markets
• High logistics costs overall.

Overall, it was identified that market opportunities will be further reinforced by the competitive advantages listed below. Future export decisions should capitalise on these principles to capture favourable trade opportunities:

• Counter seasonality to leading trading partners in priority markets
• Favourable trade legislation and requirements
• Strong consumer willingness to pay for premium fresh produce.