Though the Union government lifted the ban on onion exports from January 1 that was imposed from September 14, demand for it from importers is limited as competing nations have taken advantage of India's absence from the global market.
“Countries that buy from India are now having surplus supply. Competitors such as Turkey, Egypt, and Holland have cashed in,” said Madran Prakash, Director of Chennai-based Agricultural produce exporting firm Rajathi Group.
Sri Lanka, one of the main buyers of Indian onion, has 700-plus containers with onion from these countries. In the Philippines, about 2,000 containers have landed, Prakash said.
“The market was good ten days ago, just before the Government announced the lifting of the export ban. Since then, prices have dropped in the global market,” the Chennai-based export firm official said.
“The export ban was lifted only from January 1. Hardly a week has got over. The trade, which ties up with importers, has not been able to supply during the last 3-4 months,” said Dr PK Gupta, Acting Director, National Horticultural Research and Development Foundation (NHRDF), Nashik.
The trade will take time to renew their tie-ups, he said, adding: “once that happens, exports will improve gradually.”
Nashik District Onion Traders Association chairman Sohanlal Bhandari said that enquiries were being made for exports.
Trade sources said that India’s absence from the global onion market saw even those not connected with the commodity turn importers abroad.
For example, a cement importer in Sri Lanka turned an onion buyer, saying that there were good prospects in dealing with the vegetable.
Nashik trader Sushant Musale said that export demand was lukewarm as prices of Indian onion were higher.
Since the Centre announced the lifting of the ban on December 28, prices have increased by Rs 600-750 a quintal in Maharashtra’s Nashik district, the hub of onion trade, for the new onions.
On January 4, new onions were mostly traded between Rs 2,370 and Rs 2,500 in the district compared with Rs 1,550-1,750 a week ago.
“We are getting packed cargo at Rs 28-29 a kg in Mumbai,” said Prakash.
Bhandari and Musale said prices ranged between Rs 2,500 and Rs 2,900 a quintal for new onions currently.
Prices of old Rabi onions harvested in April last year are ruling around Rs 1,500 a quintal, up Rs 150 since last week.
“Onions from old stocks are priced lower due to presence of black spots on them,” Prakash said.
NHRDF’s Gupta said onions have begun to arrive much faster now with a good late Kharif crop aiding arrivals.
Musale said arrivals will continue to be higher as the harvest of the late Kharif onion continues.
Agriculture Ministry data showed that arrivals of onion last month in Maharashtra were 3.19 lakh tonnes compared with 2.28 lakh tonnes in November. In December 2019, arrivals were 3.41 lakh tonnes and 2.07 lakh tonnes in November.
Onion prices had surged to Rs 100 kg in retail outlets across the country in the third and fourth weeks of October after rains under the influence of the South-West Monsoon affected the crops in Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Gujarat.
Besides, a shortage of onion seeds and the onset of Anthronose and Twister bacteria in the crop also impacted the prices.
In order to hold the prices on the leash, the Centre banned exports and allowed duty-free imports of onions.
These measures paid dividends as onion prices crashed. With arrivals rising, farmers demanded the lifting of the ban, particularly after imports were permitted till the end of this month.
NHRDF’s Gupta said that the sowing of the current Rabi crop was good and transplanting of the seedlings was on.
Onion in India is grown in three seasons — Kharif (summer), late Kharif and Rabi (winter). Kharif onions begin arriving in September, late Kharif after November and rabi from April onwards.
(Subramani Ra Mancombu is a journalist based in Chennai, who writes on topics in commodities and agriculture)