Indian Onions Losing Overseas Markets to China & Pak: Exporters.

Though the government has lifted a ban on onion exports, the Indian produce is losing out to its rivals from neighboring China and Pakistan due to high prices and uncertain policies, according to exporters.

"We could export a meagre 4,000-5,000 tonnes of onions during the last week (from September 20, when the ban was lifted, till September 27)," a senior office-bearer of the Mumbai-based Agriculture Export Association said.

Indian onions, which traditionally see great demand from markets in the Gulf, Far East (Singapore, Malaysia and Indonesia) and Sri Lanka, are finding it difficult to compete with produce from China and Pakistan, which are selling at a lower export price, a trade source said.

India is the world's second-largest onion producer after China.

The Indian government had fixed the minimum export price (MEP) for onions at $475 a tonne after lifting a ban on exports on September 20.

The ban was in force for two weeks as a precautionary measure to maintain domestic supply of the bulb and check inflation.

The AEA office-bearer also attributed the uncompetitiveness of Indian onions in international markets to the high MEP and "switch on/switch off policy" on exports.

"In the absence of Indian onions (due to the ban from September 9-20 this year), many Singapore traders have contracted with Chinese exporters for a month, leaving no place for Indian produce," he said.

Onions from China and Pakistan, which are selling at $300 per tonne and $325/tonne, respectively, in international markets, have rendered the Indian produce uncompetitive, the sources said.

In normal times, the export figure would be as high as 70,000 tonnes a month, he said.

"Dubai used to be flooded with Indian onions earlier. But today, one can find onion-laden cargoes from six other countries, including those from Pakistan and Iran there," the AEA official, who is also in the onion export business, said.

Another exporter from Pune echoed similar views. R P Gupta, the Director of the Nasik-based National Horticultural Research and Development Foundation (NHRDF), said no increase in off take was immediately visible in onion exports after the ban was lifted.

Sources in agri-cooperative Nafed revealed that onion exports shrunk by more than half in the first six months this year in comparison to the year-ago period.

India exported around 5.58 lakh tonnes of onions between April 1 and September 26, the sources said.

Exports of the kitchen staple stood at 9.34 lakh tones during the corresponding period of 2010 and 11.21 lakh tones in 2009, they added.

The government had imposed a ban on onion exports on September 9, when prices of the bulb had soared to Rs. 25 a kg in the retail market.

Source : profit.ndtv.com