House investigates the mystery of unexplained surge, vanishing contraband of onions in warehouses

The House of Representatives, on Wednesday, January 25 grilled officials of the Department of Agriculture over the unexplained spike of onion prices and the case of “vanishing” smuggled onions in some warehouses.

In a hearing led by the lower house chamber, lawmakers asked agriculture officials on how a modest shortage led to a price surge in December.

Upon being asked, both (Marikina Rep. Stella Quimbo and Agriculture Director Gerald Glenn Panganiban agreed that there is a “mystery” behind the spike in onion prices.

The DA official revealed that they monitored some warehouses with onions but when inspected, the onions disappeared without a trace.  However, asked if there are cartels behind the spike in onion prices, the DA official avoided answering the question.  “I can’t say if there are cartels, but aside from production and importation, it seems there are forces controlling (the supply). I don’t know if those are called cartels,” Panganiban said.  

Also during the hearing, the DA official divulged that the department has received reports of “thousands of bags” of onions disappearing from warehouses ahead of raids by the authorities. “We have reports where cold storage warehouses were emptied just before a raid, right after we took pictures of the bags of onions labeled ‘Made in China,'” Panganiban said. “Those are probably thousands of bags that disappeared.”

With numerous incidents of the disappearing onions case, only one detail was shared by the DA.  Agriculture Assistant Secretary James Layug said that a warehouse owned by Morehouse Marketing was emptied of bags of onions last December 1,  the same day authorities from the National Capital Region Police Office were supposed to raid the facility.

In 2021, the DA said that they seized at least P9 million worth of smuggled agricultural products from a warehouse owned by the same company.  

Based on the data provided by the agriculture department, the overall supply of onions in 2022 was only short by around 25,000 metric tons, just 7% of the total demand of around 364,000 metric tons.  Onion prices started surging in September and reached an all-time high of P700 per kilogram in December.

The lawmaker criticized the DA’s late importation and poor forecasting, this is after Agriculture Director Panganiban admitted that the department determined last August that there would be enough onion supply. The department did not issue import permits for onions from April to December 2022.

The DA official said that the department is expecting at least 5,000 metric tons of onions from the import permits issued in January, but the actual number could be lower than that due to long-standing issues with transportation.  

He added that the department has also caught smugglers who “misdeclared” onions as bread, fishball and pastries.

“Of the smugglers we caught, most are not registered with the Bureau of Plant Industry. Only one was registered here,” Panganiban said.  

Troy Tans from the Bureau of Customs intelligence reported that they had confiscated at least P600 Million smuggled agricultural products in 2023 alone.

Ramon Silverio, an onion farmer and the chairperson of the Kaakibat Provincial Cooperative Council, said that the country’s onion farmers can produce enough to meet the shortfall but the lack of government-owned cold storage facilities leaves farmers at the mercy of businessmen.

“The government needs to build more cold storage facilities so farmers can dictate the prices of their own crops,” Silverio said in Filipino. “If the businessmen tell us to set (our farmgate price) at P8 to P15 (per kilogram), there’s nothing we can do, because there are not enough facilities where we can store our harvest.”

Besides preventing post-harvest losses, Silverio said that the DA has to act on the shortage of storage facilities to prevent hoarding.

“If the government provides a cold storage facility for every cooperative, this would give them a list of who owns the facilities and allow them to monitor its contents. (This will also) help avoid added costs of production,” Silverio added.

Panganiban said the DA has P240 million to build cold storage facilities in the Ilocos, Cagayan Valley, Central Luzon and the Mimaropa regions. The department plans to put up two facilities worth P20 million and five units worth P40 million to store at least 120,000 bags or 3,000 metric tons of onions.

This would double the number of cold storage facilities that the DA has established since 2018. Currently, the DA’s seven cold storage facilities can store about 2,250 to 2,430 metric tons of onion.

Panganiban said that the DA aims to put up these facilities near key production areas to shorten farmers’ travel time.

Philippines Seed Industry Association (PSIA) president Mary Ann Sayoc said that some of the government’s cold storage facilities are “not optimum,” which leads to onions rotting before the end of their shelf life. 

“Some of the onions in these storages rot. Normally onion varieties can be sold for 6 to 8 months. But towards the 7th or 8th month, the quality of the stored onions deteriorates due to poor conditions,” Sayoc said.

Red onions are currently sold at the market for P240 to P350 per kilogram, while white onions can be bought for P170 to P350 a kilo, based on the DA’s latest price monitoring report.