Onion exports to Sri Lanka and Bangladesh have slowed down due to the current financial crisis in Sri Lanka and measures taken by the Bangladesh government to encourage local production in addition to imposing a tax on imported onions. Bangladesh is the biggest importer of onions from India, followed by Sri Lanka.
Exporters from Nashik, the country’s largest onion growing belt, claim that exports to Sri Lanka have reduced due to a delay in payments. The island nation is in the grip of its most painful economic downturn since independence in 1948, with severe shortages of essential goods and regular blackouts.
Exporters said total exports to Sri Lanka and Bangladesh have dropped from 4,000-5,000 tonne per week to 1,500 tonne a week.
Exporters who did not wish to be named said they are yet to receive payment for consignments sent in December 2021. The payment window has increased from 15-20 days to two-three months due to the currency crisis in the country, an exporter said. Exporters fear that if the government does not take immediate action, it will face serious consequences.
Manoj Jain, a major exporter from Lasalgaon said exporters have been facing several challenges which should be addressed by the government. Container prices have almost quadrupled in the last two years, making it difficult to export commodities.
Bangladesh, meanwhile, is encouraging local cultivation of onion and has also imposed an import tax of around 2.80 taka per kg. This step was taken after frequent export bans by the Indian government led a rise in onion prices in the local Bangladesh markets, he said. Bangladesh needs to import 0.8-1 million tonne of onions every year, a majority of which is imported from India.
Another exporter said other countries, including Pakistan, Myanmar and Afghanistan, have taken advantage and have captured the market in the absence of India, and now it has become difficult for India to win the market back.
Suvarna Jagtap, chairperson, Lasalgaon APMC, said exports to Bangladesh and Sri Lanka have been impacted because of import permits levied by Bangladesh and the Sri Lankan economic crisis. Demand for onions from Nashik has also declined since other states have begun producing onion, she said.
Ajit Shah, president, Horticulture Produce Exporters Association, said exports are likely to pick up since no other country currently has stocks.
India exported 15.88 lakh tonne in the 2017-18 season, 21.82 lakh tonne in the 2018-19 season, 18.49 lakh tonne in 2019-20 and 15.75 lakh tonne in 2020-21. In FY21, India exported $378 million worth of onions, 15% higher than the previous year.The top exporting destinations are Bangladesh ($101 million), Malaysia ($62 million), the United Arab Emirates ($44 million) and Sri Lanka ($42 million).
Indian onions have some established markets, especially in West Asian countries, Bangladesh, Indonesia, Sri Lanka and the UK, among others.
India’s onion production is estimated to increase by 16.81% to 31.12 million tonnes in the crop year beginning July 2022 on likely increase in acreage. The country had harvested 26.64 million tonnes of onion in the 2021-22 crop year (July-June).
