Overseas markets wipe away tears of onion traders hit by low domestic prices

Onion exports have picked up on firm overseas demand even as domestic prices continue to rule low, as the new crop hits the markets in the backdrop of huge carry forward stocks.

Experts attribute the pick-up in demand over the past few months to a lower global output due to changing climatic conditions.

Ganpat Vaishnav, owner of Ganesh Impex, moved to exporting onions over the last three months, given the massive demand.

“I kept getting huge orders from Malaysia and Dubai. Earlier, I used to only trade in the local market, but the crash in onion prices here was unsettling. Now, I am able to ship large quantities and can command a decent margin,” Vaishnav told BusinessLine.

In the local market, Ganesh Impex dealt with 50-60 tonnes of onion per day, and ended most days in the red due to fluctuating price. Now, on any given day, the company exports 100-150 tonnes, “especially to Dubai, Indonesia and Sri Lanka with demand rising every day,” he said.

It has bolstered hopes for many other traders, who have also taken to exports to keep their business from folding up. India is the world’s second-largest producer of onions, after China.

The drastic fall in prices has brought tears to many onion traders, said Vaishnav, adding that farmers who had stored summer onions in the hope of better prices, have been selling the bulb at “throwaway prices since they have been incurring heavy losses”. Modal prices of onion at Lasalgaon, the largest market in the country are now hovering at ₹776 per quintal as against ₹1,019 in early November.

In volume terms, fresh onion exports during April-August this year stood at 8.31 lakh tonnes (lt), an increase of around 5 per cent over corresponding last year's 7.93 lt. In value terms onion exports were up at ₹1,171.71 crore during April-August as against ₹1,019.29 crore in corresponding period last year. India exported 15.88 lt of fresh onion in 2017-18 and netted ₹3,088.82 crore.

Satyajit Roy, Founder of EGK (Everyday Gourmet Kitchen) Foods, a food processing enterprise, said cheaper onions from India are all the rage in West Asia.

Dubai, Sharjah, Doha, Muscat, Bahrain, Saudi Arabia and Kuwait are eager to source the pungent bulb from India, Roy adds, with Europe and the US not far behind.

“Demand is phenomenal, especially for red onions. There are orders for pink and white ones, but red onions from India are imported all over the world since they are not grown in many places,” said Roy.

T P Ambre, from the National Horticultural Research and Development Foundation, under NAFED, told BusinessLine that export orders for new onions were soaring especially from Maharashtra, Andhra Pradesh and Karnataka. “Demand is high from Oman, Qatar, Saudi Arabia, Sri Lanka, Malaysia and Singapore. Though maximum orders are from the Gulf countries, white onion from Gujarat is a big draw with Europe and the US, given its low pungent quality,” Ambre said.

Ambre said adverse climatic conditions have led to smaller crops globally. The effect of the heat wave in Europe, Canada and the UShas hit onion output. Heavy rains in West Asia has damaged crops as well as delayed shipments.

HP Sharma, Deputy Director (Stat), National Horticultural Research and Development Foundation added that export orders for Indian onions were also coming in a big way from Bangladesh, Singapore, Thailand, Maldives, Mauritius, Nepal, Hong Kong and Indonesia.

Ambre said farmers have had to battle bad weather across the country, which has dwindled supplies in some areas. “Though planting is done across 63,000 hectare in Maharashtra, we have covered an average 60,000 hectare this year. No rains in June last year led to late planting, which led to high prices. Patchy rains and few showers this year have further created havoc,” he said.

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