India’s onion exports have been affected by late arrivals of the early kharif crop, problems with the quality of current arrivals and the bulb being quoted higher than Pakistan and other competing nations.

“The quality of the kharif onion crop that is currently arriving is not good. We expect the quality to improve in a week’s time,” said Ajith Shah, President, Horticulture Produce Exporters Association (HPEA).

“Arrivals of the kharif crop have been delayed in the South due to heavy rains in October and November. For example, the arrival of rose onions from Kadapa in Andhra Pradesh has been delayed as its harvest has been affected due to heavy rains,” said M Madan Prakash, President, Agri Commodities Exporters’ Association (ACEA).

Onion arrivals at standstill in South

The rose onion in Kadapa had to be planted again due to the damage caused by inclement weather as a result of which the crop that had to hit the market in November will arrive next month-end.

Demand for small onions from S-E Asia comes to exporters’ rescue

“Even the arrival of rose onions from Karnataka has been delayed. They are now expected to hit the market in February only,” Prakash said, adding that onion exports from the South have almost come to a halt.

PK Gupta, joint director, National Horticultural Research and Development Foundation, Nashik, said kharif onion has begun to arrive in Maharashtra markets. “Three days ago, there was rain and hailstorm in the growing areas. But details of any damage to the crop are awaited,” he said.

‘ Huge difference in onion price hurts’

The late kharif onion is also getting ready, while rabi onion has been planted. “Onion production will be good and there is no cause for worry for domestic consumers. Exports have been hit by competition,” Gupta said.

Shah said Indian onion is quoted higher in the export market, hence exports have been affected. “Pakistan onion is quoted at $300 a tonne (₹22,450) whereas Indian onion is quoted at $500 (₹37,375). This is a huge difference and hurting shipments,” he said.

Fearing export ban, traditional onion buyers abroad switch to other origins

The higher prices, along with quality issues, have slowed exports. Besides, there are other issues such as payment problems in Sri Lanka.

Lankan forex woes

“We are one of the major suppliers of onions to Sri Lanka. But it is facing a currency crisis and buyers from there owe money to our exporters. Hence, our shippers have stopped loading to Colombo,” Shah said.

Sri Lanka, which has curtailed imports to tackle the crisis, is suffering from currency woes after the 2019 Easter bomb blasts, spread of the Covid pandemic and policy decisions of the Gotabaya Rajapaksa government not yielding dividends.

“The Sri Lanka crisis is definitely pulling down our onion exports,” said Shah.

ACEA’s Prakash said the Philippines usually imports a good quantity of onions from India but this year it is not buying much. “Demand from that country is also not there,” he said.

Domestic prices soften

Exports were also affected when onion prices ruled higher during the last week of November before easing now. On November 24, the modal price (rate at which most trades take place) of red onion was ₹2,500 a quintal at Lasalgaon market yard, Asia’s largest for onion. Prices dropped to ₹1,880 on Tuesday. During the same period a year ago, the rates were higher at ₹2,400.

“This year, the Government or consumers need not worry about onion prices. They will be under control,” said Gupta.

During 2019 and 2020, onion prices had topped ₹100 a kg after unseasonal rains affected the crop in key growing areas. The Centre had to impose a ban on exports and stock limits besides allowing duty-free imports.

During the 2020-21 season (July-June), onion production has been estimated at 26.92 million tonnes (mt) against 26.09 mt the previous year and 22.81 mt in 2018-19.

Related Topics
comment COMMENT NOW