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

With common potential buyers of Indian onions hesitating to area orders in see of the Centre banning exports in September last 12 months and in December 2019, onion selling prices have dropped about 10 for every cent given that the commencing of July.

“Our potential buyers abroad are not inserting orders for onions, pointing to the ban Centre imposed about September last 12 months and the 12 months right before. They have previously switched more than to other origins,” said Ajit Shah, President, Horticulture Generate Exporters Affiliation (HPEA).

Prospective buyers are not looking at even inserting orders in the limited-phrase, he said.

Pakistan’s gain

The other cause why Indian onion is assembly with lukewarm need in the worldwide sector is that the Pakistan commodity is aggressive.

“Pakistan is supplying onion at charges lower than India. This has slowed down our exports,” Sohanlal Bhandari, Chairman, Nashik District Onion Traders Affiliation.

Shah said Indian onion is quoted, based on high quality, at $320-fifty (₹23,800-26,050) a tonne cost-free-on-board compared with Pakistan’s $320 (₹23,800) a tonne, charge and freight. “Pakistan onion is lower by $seventy five (₹5,600) a tonne and it is offered for a lot more than 250 days in a 12 months now,” he said.

Pakistan also enjoys the gain of a weak currency versus the US greenback. This will make onion from the neighbouring state more affordable in greenback phrases.

Payment challenges

“Onion exports have slowed down to nations these kinds of as Sri Lanka and Malaysia because of to payment challenges and Covid pandemic,” said M Madan Prakash, President, Agri Commodities Exporters Affiliation (ACEA).

Even though a hundred twenty five containers of the bulb recently went from India to Colombo, potential buyers faced challenges in paying out given that Sri Lanka is struggling with foreign exchange disaster, Prakash said, including that Malaysia has lower its purchases because of to Covid constraints in that country.

The ACEA President said that onion selling prices could come under tension following month given that the new onion crop will arrive in the marketplaces from Karnataka. “Arrivals of the new crop will commence in 2-3 months,” he said.

Repeat problem not likely

“This 12 months, we may perhaps not face the problem we encounter in 2019 and 2020. We have had good rains in rising locations of Maharashtra and the early Kharif onion arrivals could commence in September. By Oct, arrivals could be in whole swing,” said Suvarna Jagtap, Chairperson, Lasalgaon Agricultural Generate Promoting Committee (APMC).

Selling prices have also been ruling steady this 12 months in the domestic sector with the sector going possibly way by ₹200 or ₹300 a quintal, she said.

Presently, super high quality onion in Lasalgaon APMC, Asia’s greatest for the commodity, is about ₹2,000 a quintal versus ₹2,two hundred at the commence of the month. The modal value (the price at which most trades took area) of truthful regular high quality (FAQ) onion at the APMC on Wednesday was ₹1,590 a quintal compared with one,720 on July 2.

Rivals hike crop acreage

All through the identical time last 12 months, selling prices of FAQ onion at Lasalgaon ruled under ₹750. In retail marketplaces on Wednesday, onion, which topped ₹100 a kg in Oct last 12 months, ruled at ₹35 in New Delhi and ₹28 in Mumbai, in accordance to the Ministry of Customer Affairs.

“India’s regular onion export ban has resulted in competing nations these kinds of as Pakistan, Iraq and Turkey to increase the spot under the crop. The Centre’s advertisement hoc coverage of abruptly banning exports is hampering shipments,” said HCEA’s Shah.

Suvarna Jagtap said that onion selling prices are not witnessing any spike despite arrivals dropping by fifty percent. “At Lasalgaon APMC, arrivals are at present 2,000-2,500 tonnes versus four,000-5,000 tonnes early this month,” she said.

The easing of Covid shutdown constraints and opening of accommodations and dining establishments could see a increase in need for onion, the Lasalgaon APMC Chairperson said.

Final 12 months, exports had topped 2019 concentrations by September right before the Centre banned the shipments just after retail selling prices topped ₹100 a kg. The Union Government also authorized obligation-cost-free imports and imposed a cap on inventory holdings, apart from the ban, to manage the selling prices.

Selling prices rose just after the crop was impacted by unseasonal rains in August and then in Oct last 12 months. But the substantial selling prices inspired growers to plant a lot more onion seedlings.

In accordance to the Ministry of Agriculture, onion production was a history 26.ninety two million tonnes (mt) last time (July 2020-June 2021) compared with 26.09 mt the earlier time with the spot under the crop growing to one.six million hectares (mh) from one.43 mh.