STATE-OWNED Food Terminal Inc. has been ordered to buy onions directly from farmers, who had complained of freefalling farmgate prices of the crop, the Department of Agriculture said on Tuesday.
The order was issued by Agriculture Secretary Francisco Tiu Laurel Jr. as a preemptive measure to prevent a price slump. The move comes as harvest season peaks, when an abundance of onion supply usually lowers its prices.
In any case, FTI President Joseph Lo said during an inspection in Nueva Ecija that farmgate prices have stabilized to as high as P45/kg.
“Our goal is to buy at prices that are fair to farmers, at levels that are enough to make onion farming profitable and sustain their planting intentions,” Lo said.
In major onion-producing provinces like Occidental Mindoro, Pangasinan, and Nueva Ecija, farmgate prices have reportedly plummeted to as low as P8–P10 per kilogram against average market prices for red onions at P30–P45/kg.
The sharp drop in farmgate prices was allegedly due to an oversupply of imported onions, which the DA has denied.
The DA said it will provide cold-storage space in Nueva Ecija, the country’s onion capital and the center of price volatility. The storage space can accommodate 50,000 28-kilo bags of onions, which could be increased if necessary.
Cold-storage facilities extend the shelf life of vegetables and keep supply and prices stable throughout the year, Tiu Laurel said.
Nueva Ecija produces over half of the total amount of onions sold in the market nationwide. The municipality of Bongabon alone accounts for 15 percent of the country’s total onion output.
The FTI will also purchase from other onion-producing provinces, including Occidental Mindoro, Pangasinan and Cagayan Valley.
Timing is important, the DA said, noting that in past cycles, large-scale imports had overlapped with local supply and indeed caused a decline in farmgate prices. The situation discouraged onion growers and caused supply shortages months later. This forced more imports and built a boom-and-bust cycle, the DA explained.
“By absorbing supply and expanding cold storage, FTI is effectively acting as a buffer buyer, smoothing out gluts and tempering price swings,“ said the DA.
But while the DA has yet to determine whether buying 50,000 bags or around 1,400 metric tons of onions is enough to stabilize prices, it assured the public that the government is ready to act early and defend farmgate prices.
Imported onion stocks will run out by the peak of the harvest season this March to April, Tiu Laurel assured farmers.
