Onion Price Spike Slows Pace of Exports
Exports have declined by 30% since prices in domestic market started increasing
Pune: A steep spike in domestic prices has put a break on onion export momentum. Domestic wholesale prices of onion have doubled in the last fortnight and countries like Pakistan, China and Egypt with stocks are competing with Indian exporters in traditional markets like Middle East and Sri Lanka.
India’s onion exports had doubled in 2016-17 over the previous year as Indian onion prices were the most competitive in the world. Compared to 12 lakh tonne onion exported in 2015-16, India’s onion exports was 24 lakh tonnes in 2016-17. “Onion exports have declined by 30% since prices in domestic market started increasing. Exports can decline further if onion the prices continue to rise,” said Ajit Shah, president, Onion Exporters Association of India.
The bullish sentiment in onion is backed by three factors; procurement by Madhya Pradesh government, heavy rainfall in Gujarat and expectations of a lower and delayed crop in Karnataka. India had seen a bumper crop of onion in 2016, which led to prices tumbling below production costs. Farmers protested, forcing Madhya Pradesh government to procure onions at .₹ 8/kg. The MP government dumped onions at .₹ 2/kg to .₹ 3/kg, wiping out excess supply from the system.
Heavy rainfall in Gujarat re- duced onion movement in the state. Karnataka grows a small kharif crop of onion, which normally hits the market from August. However, this crop is likely to be down by at least 50% and would be delayed due to deficient rainfall. “Presently, we are getting most of the onion supply from Maharashtra as local crop is less and delayed, which is keeping prices on higher side,” said BL Shankarappa, an onion trader from Karnataka.
”The present price rise is speculative as prices are rising sharply almost everyday. This has adversely affected export. No exporter is buying from the domestic market,” said Danish Shah, an onion exporter from Maharashtra.
Jaydatta Holkar, chairman, Lasalgaon APMC, the biggest hub for onion trade in the country said arrivals have been good despite increase in prices.