Demand for small onions from S-E Asia comes to exporters’ rescue

Demand from customers for onions smaller sized in dimensions from South-East Asia is supporting exports of the commodity even as large freight fees have impacted Indian onion shipments to West Asia, 1 of its main marketplaces.

“There is superior demand from customers for modest onions (of twenty five-35 mm diameter dimensions) in countries this kind of as Malaysia and Thailand. Other than, demand from customers is also superior for sambhar onions (shallots) from these destinations,” explained M Madan Prakash, President, Agri Commodities Exporters’ Association (ACEA).

South-East Asian nations, this kind of as Malaysia, invest in shallots from Thailand but given that materials are small from Bangkok, demand from customers has cropped for Indian kinds.

Aggressive fees

“Indian modest onions are competitive in the Significantly-East marketplaces. There is superior margin way too for exporters,” explained Mukesh Singh, Managing Director, Mubala Agro Commodities Pvt Ltd that trades in domestic and overseas marketplaces.

Shallots are delivered and packed at ₹45 a kg in Chennai. For South-East Asia, shallots are quoted at $850 (₹63,275) a tonne, expense and freight. “During the peak time, shallots quoted as large as $one,300 (₹96,775) a tonne,” explained Prakash.

At the very same time, modest dimensions onions are delivered at ₹20 a kg from Maharashtra. “There is demand from customers for these onions from Bengal way too,” explained the ACEA president.

“We are obtaining superior charges for modest onions from South-East Asia. Even Hong Kong has started to invest in from us,” explained Ajit Shah, President, Horticulture Develop Exporters’ Association (HPEA).

“Now the Centre has introduced the Remission of Obligations and Taxes on Exported Products and solutions, we can try out and make superior out of it,” explained Mubala Agro’s Singh.

‘New gamers gaining’

Nashik-based exporter Vikas Chaudhary explained onion exports from India have been impacted thanks to large freight fees that have manufactured Pakistan’s generate extra competitive in marketplaces this kind of as Dubai and other Gulf destinations.

“New gamers, other than Pakistan, are gaining floor in the Gulf marketplaces. Now, our high-quality is also not upto to the mark given that these onions ended up harvested in April,” explained Singh.

In India, onions are harvested thrice — early kharif through Oct-December, late kharif through January-March and rabi through March-Might.

“Though Indian onions are only marginally costlier than the Pakistan kinds in the Gulf marketplace, the latter is gaining in see of freight edge,” explained the Mubala Agro Commodities formal.

HCEA’s Shah explained Indian onions are presently quoted at $310 a tonne (₹23,075) absolutely free-on-board. “Pakistan onions are quoted decrease by about $30 (₹2,250),” he explained.

Lankan forex trading disaster

The other challenge that has impacted Indian onion exporters is Sri Lanka’s foreign trade disaster. “Colombo has stopped imports in see of the disaster,” explained ACEA’s Prakash.

“Sri Lanka was a superior marketplace for us. In see of the disaster, we are now wanting at South-East and Significantly-East,” explained Mubala Agro’s Singh.

“Exporters are experiencing problems right after shipping and delivery to Sri Lanka. Payments are not coming. Or else, we get superior demand from customers from the island country,” explained Shah.

Singh explained the emphasis of onion trade now is to very clear the inventory forward of the early kharif onion arrival following thirty day period. “Karnataka crop has started arriving in the marketplace and the high-quality is superior. It is finding takers even in the north-east, changing Nashik onions,” he explained.

Exporter Vikas Chaudhary explained onion arrivals have greater, ensuing in charges ruling at ₹17-18 a kg presently. “Demand is also slack in see of the existing auspicious thirty day period Shravan,” he explained.

In accordance to the Ministry of Agriculture, the modal selling price (price at which most trades get area) at Lasalgaon — Asia’s major marketplace for the bulb — is presently at ₹1,760 a quintal against ₹1,650 at the get started of the thirty day period. Throughout the very same time very last yr, the modal selling price was ₹1,670.

“Things need to appear up on the export front in a different three months, notably when the new crops appear to the marketplaces from Maharashtra,” explained HCEA’s Shah.

Curbs on exports

Onion exports ended up hit through the very last two fiscals right after the Centre suspended shipments as retail charges of the bulb topped ₹100 a kg. Apart from suspending exports, the Centre allowed duty-absolutely free imports of onion and imposed inventory boundaries.

Onion exports experienced touched a history 34.ninety two lakh tonnes (lt) through 2016-seventeen. Considering the fact that then, they have declined. In 2019-20, exports hit a 5-yr small of eleven.49 lt just before recovering to 13.07 lt very last fiscal. Exports could have been bigger but for the Government’s curbs on the shipments.

In accordance to the Ministry of Agriculture, onion production was a history 26.ninety two million tonnes (mt) very last time (July 2020-June 2021) as opposed with 26.09 mt the prior time with the space beneath the crop soaring to one.6 million hectares (mh) from one.forty three mh.