Rising global demand for onions is creating a lucrative opportunity for investors to tap into processing and export, unlocking new revenue streams in Nigeria’s agricultural sector.
Nigeria’s onion production has witnessed significant growth, positioning the country as a top grower of the crop globally.
With an annual production of approximately 2 million metric tons, Nigeria ranks second place in Africa and seventh globally.
The country boasts a robust onion market, supplying neighboring African nations such as Côte d’Ivoire, Niger, Ghana, Benin, Chad, Cameroon, and Senegal.
Currently, Nigeria exports onions in little quantity to global markets including France, the Netherlands, São Tomé, and the European Union, according to the 2023 World Integrated Trade Solution (WITS) report.
Aliyu Maitasamu, chairman of the National Onion Producers, Processors, and Marketers Association of Nigeria (NOPPMAN), highlighted significant investment opportunities within the onion value chain, particularly in storage, processing, and export sectors.
He emphasised that farmers lose nearly 50 percent of their onion produce due to inadequate storage, presenting a crucial opportunity for investors to build solar-powered warehouses that could significantly reduce post-harvest losses.
Maitasamu also underscored the untapped potential in onion processing, noting that investing in value-added products could not only minimise waste but also provide a competitive edge in global markets.
He pointed out the growing demand for onions across many African nations, making onion exports another key opportunity.
Despite this, the Nigerian Export Promotion Council reports that around 99 percent of the country’s onions are sold raw. By processing onions into products like powder, dry flakes, or paste, Nigeria could unlock substantial global market opportunities.
Mustapha Bala, an onion exporter to neighbouring West African countries, said investors can explore various opportunities in onion processing, ranging from dehydration, pickling and powder production.
According to him, onion powder and paste production can provide a competitive edge for investors, noting that processors can also tap into the vast African market as most countries on the continent do not have a competitive advantage in its production.
Global market size
The global onions and shallots market was valued at $55.26 billion in 2024 and is projected to grow to $65.44 billion by 2033, reflecting a compound annual growth rate (CAGR) of 2.1 percent from 2025 to 2033, according to Business Research Insight.
Recent data show that onion volumes are down this winter across several countries, with Spain seeing a sharp decline of up to 40 percent, and other countries like Germany, France, and the United States also reporting notable, though less severe, losses.
Large-sized onions, in particular, are hard to find, and this shortage has pushed prices higher throughout much of the global market. While this may strain consumers, it presents a potential opportunity for investors who might also grapple with high production costs.
“The prices for onion are attractive locally and internationally,” Bala said, noting that India and Pakistan, top growers of onion, have been struggling to boost production owing to extreme weather conditions, creating opportunity for other exporters.
Investors seizing opportunity
Maitasamu confirmed that, at present, there are no industrial onion processing plants in the country. However, he noted that firms have made strides in addressing this gap, with a 10,000-metric-ton onion storage facility under construction in Kano State, set to begin operations later this year.
Additionally, a $5 million onion processing plant, with a 30,000-metric-ton capacity, is slated to launch in Sokoto State in the last quarter of 2025 or the first quarter of 2026.
Maitasamu also called on more investors to seize the opportunity to build additional storage facilities and processing plants across the country, emphasizing the potential for growth in the sector.
Challenges in the industry
Maitasamu highlighted several key challenges plaguing the onion industry, including high post-harvest losses, limited access to improved seed varieties, inadequate credit facilities, and the absence of agricultural subsidies for onion farmers.
He pointed out that the lack of proper storage infrastructure in the country forces farmers to rely on traditional storage methods, resulting in the loss of over 50 percent of their harvest. This not only leads to significant economic losses for farmers but also impacts the broader economy.
Need for PPP
Maitasamu further highlighted the association’s ongoing collaboration with the Raw Materials Research and Development Council (RMRDC) to boost raw material production and enhance processing capabilities.
He noted that several leading food processing companies in Nigeria, such as UAC, Unilever, and others, require onion powder as a key raw material, creating a significant opportunity in the onion processing sector.
He also shared that negotiations are currently underway with the Ministry of Agriculture and Food Security, the Nigerian Export Promotion Council (NEPC), Agricultural Development Funds, and the National Assembly regarding input materials for the upcoming wet season onion production.
Why are onions pricey?
Maitasamu attributed the surge in onion prices to a combination of factors, including flooding, extended rainfall, post-harvest losses (over 50 percent), and a shortage of seedlings.
He highlighted that the floods caused by the damage of Alau Dam in Maiduguri, as well as the release of water from the Doron Baga and Goronyo dams in Maiduguri and Sokoto states, devastated onion farms in key producing regions such as Borno, Sokoto, and Kebbi.
He further explained that the shortage of onion seedlings created an opportunity for opportunistic individuals to import shallots, which farmers mistakenly believed to be onions. This, coupled with the widespread farm damage and the influx of off-spec seedlings, exacerbated the shortage of onions, causing prices to spike during the last quarter of 2024.
What next?
Maitasamu said the government is committed to supporting the industry’s growth, but stressed the need for timely delivery of input materials ahead of the wet season.
He also called for the possible reopening of the Tsamia border in Bagudu LGA, Kebbi State, to streamline onion exports, which would not only enhance trade but also contribute significantly to Nigeria’s GDP and economic growth. Maitasamu expressed optimism that these discussions would lead to positive outcomes, with all stakeholders working together to ensure the industry’s success.
