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Journalism of Courage
A crash in international prices and steep export duty have resulted in export of onion from India being a non starter. The Centre had lifted the blanket ban on onion earlier this month just before the onion belt of Maharashtra had voted on May 12.
Export of the kitchen staple were banned since October last year, because lower-than-expected production had squeezed supplies. For farmers this export ban resulted in lower prices which led them to protest. The export ban might have been lifted, but a steep Minimum Export Price (MEP) of $ 550/tonne and an export duty of 40 per cent was kept in place. India has reported a significantly lower than expected production of onion mainly owing to moisture stress due to the failure of the monsoon.
Traders of Nashik, while speaking to The Indian Express, said consignments to United Arab Emirates—the biggest destination of Indian onions— have become non viable due to a sudden drop in prices there. “Before the ban was lifted, landed prices of onion in Dubai was 2 Dirham, which has now dropped to around 1 Dirham,” the trader said.
(1 Dirham equals Rs 22.65). Export quality onions, at most wholesale markets is between Rs 2,000 and 2,200/ quintal, and the total FOB price inclusive of packing and transport cost for consignments to Dubai works out to be around Rs 40–45/kg. Present prices thus are not conducive for export. During the last financial year i.e., 2022–23 India had exported 25.25 lakh tonnes of onion of which 4 lakh tonnes were exported to the UAE.
The drop in Dubai prices traders said was due to availability of onion from China, Egypt and Pakistan. Indian exporters have said that till export duty is not reduced they would wait, rather than run up losses. “Due to the almost nil exports, domestic prices have remained more of less as they were before the ban was lifted,” traders said. At present the average traded price of the bulb at Lasalgaon’s wholesale market in Nashik is between Rs 1,400–1,500/quintal. Traders have ruled out any rise in prices till exports improve.
