Falling onion prices cheer dehydration industry

Lower prices boost dehydrated onion exports from India by 50%

While farmers are calling for lower onion prices this year, it has been a turnaround for dehydration players. Lower prices have made the onion dehydration industry internationally competitive.

According to industry sources, in 2015, exports of dehydrated onion were about 30,000 tonnes, while this year it has risen by about 50 per cent to 45,000-46,000 tonnes.

“We have enjoyed a good time this year as onion prices have remained low. The prices of raw onions are in our favour and have helped us maintain our finished product prices at a competitive level internationally,” said Asgar Chhatariya, managing director of Chhatariya Foods.

India’s onion production is to estimated reach 21 million tonnes (mt) this year, against 19 mt last year. Because of higher production, prices have remained under pressure during the year. Onion pries have on an average traded in the range of Rs 2-8 per kg at wholesale markets this year, against Rs 8-13 per kg in 2015. What's more, in the first week of October, prices crashed to Rs 1-1.50 a kg in the Lasalgaon market.  

“Onion prices in the local market have come under pressure because of higher production and this has enabled dehydrated onion producers to offer their products at competitive rates in the international market. The prices are in our favor and business has doubled this season,” said Vitthalbhai Koradiya, president, All India Dehydration Association, and managing director of Maharaja Dehydration. Industry players are expecting exports to touch 50,000 tonnes by October end, which was about 30,000 last year. In addition, 10,000 tonnes more dehydrated onions could be exported by December end if demand continues.

Internationally, Indian dehydrated onion prices have gone down to $1,300-1,500 per tonne, enhancing India's competitiveness. On the other hand, countries like China and Egypt are offering dehydrated onion at $1,700-2,000 per tonne.

Kirit Mehta, managing director of Janak Dehydration, said, “So far there has been good business as we are able to offer dehydrated onions at lower rates than China and Egypt. Currently, demand is limited, but we are expecting fresh demand to come up by November and December, which will further increase exports.”