Onion prices in Poland, a key producer in the EU, have fallen almost 60 per cent since the start of the year following a better than expected harvest.
Commodities data firm Mintec predicts that Polish production this year is up 15 per cent to some 630,000 tonnes as a result of favourable weather conditions during the growing season.
Another important factor supporting overproduction has been crop development across other leading EU producers, including Spain, the Netherlands and Germany, which has raised concerns over potential oversupply in Europe as a whole.
Prices are currently at levels last seen in 2014, when a large crop coincided with a Russian import ban in reaction to sanctions over Crimea’s annexation, which led then to a decline in exports and oversupply in the EU.
The Russian government decided in June to extend its ban on EU food imports until the end of 2017, in retaliation for EU sanctions over Ukraine.
The EU imposed economic sanctions on Russia’s banking, oil and defence sectors over its annexation of Crimea in 2014 and support for eastern Ukrainian separatists. In response, Russia banned a significant number of EU food products from entering its market.
Overall trade between Russia and the EU dropped by over $180bn between 2013 and last year. Together with slowing Chinese demand, Russia’s embargo has put enormous pressure on an already struggling EU agricultural markets and distorted the markets for produce, not least apples and other fruit, vegetable crops and meat exports.