India's onion exports plunge due to high minimum export price

Owing to high Minimum Export Price (MEP) of onion after lifting of ban in late February, shipment of the bulb from India dropped to as low as about 10 per cent as compared to last year, a development which helped onion exporters of Pakistan, China and Iran having lower MEP.

Indian onion traders contracted only 27,300 tonnes of the root vegetable from February 17 (when the government lifted the ban) to March 23 this year, sources in agri-cooperative Nafed, the main agency for contracting onion export, said.

The country had exported 2.81 lakh tonnes of onion during the corresponding period a year ago, they said.

The government has slashed the MEP of onion other than Bangalore Rose Onions and Krishnapuram onions, to $170 a tonne on March 31, 2011 from USD 600 per tonne on February 17.

Following strong intervention by Union agriculture minister Sharad Pawar, the government had on March 1, this year brought down MEP to $450 per tonne from $600 a tonne. Later, it was brought down in quick successions to $350 a tonne, $275 before bringing it to $170 on March 31 this year.

The government had imposed a ban on export of the kitchen staple after its domestic prices had skyrocketed to Rs80-85 per kg in December last year. However, following crash of prices within the country, the ban was lifted.

The sources attributed the sharp fall in onion exports to the ban and later fixing MEP at a higher level which rendered the vegetable uncompetitive in the international markets.

Higher MEP in India helped countries like Pakistan, China and Iran whose export prices ranged between $170-200 during February-March this year, the sources said.

They said the impact of bringing down the MEP to internationally competitive level of $170 now would take at least a month to lift the volume of export from India.

India exports onions mainly to West Asia, Singapore and Bangladesh.

The period November to February end is considered a peak season for onion export as international demand for the veggie multiplies due to festivals.

Sources in NHRDF (National Horticulture Research Development Foundation), an arm of ICAR, which monitors onion cultivation, said Nashik in Maharashtra, the major producing region, has been witnessing surplus arrival of onion following high late kharif production.

Main onion wholesale markets like Lasalgaon, Pimpalgaon and Pune are witnessing large arrival of the veggie in the range of 20,000 to 25,000 tonnes daily nowdays, NHRDF director Nashik RK Gupta said.

Rabi harvesting of onions is going to start soon which would further glut the markets, Gupta added.