Tuesday, May 28, 2024
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Onion shortage due to delayed harvesting

The current shortage of onions in the Fijian market is due to the delayed harvesting of the new season of onions in New Zealand, as a result of poor weather.

A recent product and market assessment by the Fijian Competition and Consumer Commission (FCCC) confirmed that a tough growing season in New Zealand has contributed to the nationwide shortage of onions and the large increase in prices.

The assessment was undertaken as part of FCCC’s role of price regulation for selected food items that have been deemed basic, including perishable produce such as potatoes, onions, and garlic, which are widely used in every household on a daily basis.

FCCC chief executive Joel Abraham said they are working with the New Zealand Commerce Commission (NZCC) to monitor the situation and see how the shortage can be best addressed.

“We are in close communication with our New Zealand counterparts to explore all possible avenues to keep costs for important household consumables such as onions as sustainable as possible.”

“However, it is important to remember that Fiji is a price taker, which means that our prices are dependent on the movement of international market prices, supply, and the cost of importation.”

“Distribution costs are also considered, along with whether it is financially practical for retailers and wholesalers to sell at the suggested price.”

“Contributing factors to any change in price are included but are not limited to the supplier’s procurement cost, the international freight cost, the exchange rate and the local clearance charges.”

Since September 2022, New Zealand has announced a continuous increase in prices of food items with an emphasis on fruits and agricultural products.

Other than poor weather, pressure from global shortages, as well as production costs which have doubled and to some extent tripled, such as fertilizer, agri-chemicals, diesel and packaging materials, have all also played a part.

To meet the local demand, several traders in Fiji opted to import onions from the United States of America for the festive season, which has incurred additional freight charges, leading to the recent increase in prices of onions in stores and supermarkets.

The prices for basic food items are declared price controlled under sections 44 and 51 of the FCCC Act 2010 and pursuant to the Fijian Competition and Consumer Commission (Price Control) (Food Item Prices) Order 2021.

Other than keeping prices affordable for the average consumer, FCCC’s review of produce prices is assessed on a per shipment basis, based on procurement, which means that while importing for trade, the retail price will be declared by FCCC before it is traded in the Fijian market.

FCCC, in its verification process, ensures to also review prices based on the invoice supplied coupled with clearance cost (air freight vs shipping freight), carries out site visitation to the traders to verify the air-freight shipment, monitors the market through enforcement activities and works with traders to ensure no additional operational cost is passed on to the consumers.

The shipment in early December 2022, confirmed that the supplier’s cost has doubled, thus the retail price has been recorded to a maximum of $5.63/kg for onions.

As the short supply of onions continues, consumers can expect a further increase in the prices of onions in the coming days.

In the interim, FCCC is taking all available proactive measures, including working NZCC to soften the impact on Fijian consumers by ensuring assessments are done on a timely basis, conducting regular and surprise inspections to ensure that traders do not breach consumer protection provisions contained in the FCCC Act 2010 – particularly conditional selling or overcharging– and placing limits on the quantity of onions that individual consumers can purchase.

Meanwhile FCCC’s recent enforcement activity in the produce market in Fiji has led to three traders being investigated and 1 trader being warned for prosecution for breach of FCCC Act 2010, which included overcharging Fijians.

Reginald Chandar
Reginald Chandar
Head of News & Sports | news@fijilive.com

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