Onion export registers 10-year high in 2016-17

Exports of onions play a crucial role in balancing the domestic price of the produce in the wholesale markets. India consumes almost 90 per cent of the home-grown produce, but 10 per cent export is necessary to prevent a price crash.

Written by Parthasarathi Biswas | Pune | Published: August 3, 2017 6:50 am
Onion, onion exports, onion export rise India consumes almost 90 per cent of the home-grown produce, but 10 per cent export is necessary to prevent a price crash.

Onion exports from India have recorded a 10-year high in 2016-17, with the country recording export of 34.92 lakh tonnes (lt) of the bulb. The Central government’s decision to provide repeated extension to the export subsidy and zero minimum export price (MEP) of the produce has fuelled the exports in the last year or so. Exports of onions play a crucial role in balancing the domestic price of the produce in the wholesale markets. India consumes almost 90 per cent of the home-grown produce, but 10 per cent export is necessary to prevent a price crash. Exports had virtually stopped in 2014 due to the Central government’s decision to increase the minimum export price (MEP) in view of the steep increase in onion prices. Due to a glut in the prices of the bulb in 2015, the Central government had again reduced the MEP to zero (0) in December 2015. Also, the Central government had announced a 5 per cent export subsidy for onions to clear the glut in produce.

Since 2015, the exports of onions have seen a steady rise and at the end of the financial year 2016-17, 34.92 lt of the bulb was exported out of the country. This was almost three times the exports of the previous year when 11.14 lt of onions was sent to foreign shores. On an average, around 10 lt of onions are exported from the country every year. The United Arab Emirates (UAE), Sri Lanka, Singapore, Malayasia and Russia are major export destinations for Indian onion.

Jagdish Apshunde, an exporter from Nashik, said the government’s subsidy and the zero MEP has helped increase the export of the bulb. In June, the central government extended the subsidy for three more months to help clear the glut in the domestic markets. Exports, however, had failed to do much to improve the domestic price of onions which has been trading between Rs 5-6 per kg at most of the wholesale markets in the state.

Over the last two weeks, prices of onions have seen a spike, with the Lasalgoan market recording an average price of Rs 12 per kg. This price rise, Apshunde said, was temporary and will remain till the Kharif crop arrives early September. Market sources pointed out that the price rise was due to stockists wading in the market in anticipation of a shortage in the future. Agriculture analyst Deepak Chavan said the rise in price is due to fundamental market forces. “The outlook for the arrival of Kharif crop — the crop which is to arrive in September — is bleak. Onions from Karnataka start arriving by the end of August and there is a 40 per cent dip in the sowing area there,” he said. The dip in sowing, Chavan said, was due to farmers going for other crops due to low prices of onions. While Maharashtra has reported near normal sowing of 10,000 hectares, prices, according to Chavan, would be bullish in the face of a dip in arrival of onion
this year.

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