Cartels could be behind crazy onion prices in the Philippines, lawmaker warns

Image: Bureau of Customs
Image: Bureau of Customs

The prices for onions are so steep in the Philippines that they are now 457 percent higher than the global average. But with market vendors forced to sell bags of diced onions for a measly PHP10 (US$0.18) each just to ensure no onions go to waste, or local onion farmers further driven to financial desperation due to low farmgate prices and further threats of importation, one lawmaker is convinced that bad actors manipulating prices may be at play.

Marikina 2nd District Rep. Stella Quimbo, an economics professor at the University of the Philippines, said that cartels could be behind the onion shortage and its exorbitant rates after an agriculture official was unable to explain the sharp increase in prices.

The lawmaker reasoned at the committee hearing on agriculture and food that the steep rise in prices (which has gone as high as PHP700 or US$12.85) did not explain the discrepancy between last year’s supply and demand of onions, which was only at 7 percent.

Figures from the Department of Agriculture show that the demand for onions was 363,937 metric tons, while its supply was around 338,354 metric tons.

“At the end of the day, if we cannot explain price movements, then the only answer is cartels,” the Marikina representative said while reacting to a presentation by the Department of Agriculture – Bureau of Plant Industry Director Glenn Panganiban.

Panganiban said that he could not confirm the existence of cartels but agreed that someone was manipulating the onion supply.

“The answer really boils down to cartels. That’s it,” Quimbo insisted. “There just has to be artificial manipulation of prices because the market cannot explain why the prices were adjusted like that.”

Quimbo, who is also the vice-chair for the House budget panel, earlier filed a resolution seeking a probe into the “anticompetitive prices” of onions in the market.

The latest DA price monitoring sheet shows local red onions being sold between PHP400 to PHP600 (US$7.34 to US$11.01). Meanwhile, the Philippines’ first onion imports have just arrived in the country, which is expected to lower the prices of onions in the market.

However, this comes at the expense of local onion farmers, who said that traders would use the importation to strong-arm their way into buying their harvest at low farmgate prices.

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