Dehydration units make nil gains from onion price surge

Even as onion prices are hitting the roof amid short supplies and escalating demand, producers of dehydrated onion are staring at a lost opportunity due to lack of awareness among consumers.

A suitable alternative to fresh onions is its dehydrated version, but a very small portion of household consumers in India go for it. This means the dehydration industry makes no gains from the onion short supply or price escalation.

According to industry players, dehydrated onions are largely consumed by wholesale consumers such as hotels, ready-to-cook food or masala makers, while only a marginal portion of about 60,000 tonnes of production is used by households.

“Indian consumers are less aware about the availability and usage of dehydrated forms of onion,” said Manoj Ram, President of the All India Dehydration Association (AIDA).

“From the price point of view, dehydrated products are more stable than fresh onions and you can store it for long.

“Out of the total 60,000 tonnes of production by dehydration units, about 85 per cent is exported, mainly to European countries, while 15 per cent is consumed by domestic wholesale consumers. The share of household consumers is negligible.”

Ram further said using dehydrated onion is financially more viable than fresh onion, which costs over ₹21 per kg at the wholesale market in Lasalgaon, Maharashtra.

Dehydrated onion is available in flakes, minced or powder form. Its usage in cooking works out to about ₹8 a kg.

Vitthalbhai Koradiya, Managing Director of Maharaja Dehydration Pvt Ltd, said the recent price surge of onions will not affect the units.

“Most of the units have already completed their processing and stored their dehydrated products. We start procurement at the beginning of the season, when the prices are low. Therefore, our prices have remained stable and there is no immediate impact of the recent price rise in onion prices,” he said.

Mahuva near Bhavnagar in Gujarat is the largest onion dehydration cluster in India with about 110 factories.

“The individual units can’t spend on marketing because that will increase the cost of their product,” said Ram of AIDA, ruing that the government is doing little to spread awareness of dehydrated onions.

Currently, the Agricultural and Processed Food Products Export Development Authority (Apeda) is providing financial support to the industry for promotions and awareness campaigns.

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