High prices bring down onion exports

Moves by the government to further bring down the export price of onion from $350 a tonne stems from a steep 24% decline in overseas shipments of the staple.

India's onion export has declined by about 2.13 lakh tonnes during April to November 20 this year, agri-cooperative Nafed, a principal government agency which grants NOC for onion shipments, said.

Close on the heels of the government bringing down the export price of onion by $125 a tonne to $350 a tonne last week, Agriculture Minister Sharad Pawar on tuesday said there has been discussion on further lowering the MEP to boost exports of onion.

The country had exported 11,18,426 tonnes between April and November 30 last year, the sources said. Only 9,05,150 tonnes of the bulb had been send abroad between April and November 15, 2011, a fall of almost 24%.

The sources attributed the drop in exports to high Minimum Export Price (MEP) and inconsistent trade policy of the government.

"The export price of onion in the international markets is ruling below $300 a tonne due to which there has been lesser number of buyers for Indian onion," NHRDF Director R P Gupta told PTI.

"Inconsistency in trade policy by switching on and off of onion export is also working against India," a senior office bearer of Mumbai based Agriculture Export Association, Ajit Shah, said.

India Is the second largest producer of onions in the world after China.

Shah said China with MEP of $210 per tonne is currently dominating the international market.

Earlier, Pakistan was also shipping huge quantity of onions due to low MEP, but shortage of crop in the domestic markets has forced it to stop the shipment now, he added.

In February, the government had lifted the ban on onion exports following protests from growers  due to crashing of domestic prices.

Rajendra Sharma, General Secretary of Delhi-based Azadpur market (Asia's biggest wholesale fruits & vegetables market) said over 600 tonnes of onion is arriving from various parts of the country.

Flooding of onion and lesser demand has brought down prices in Delhi to Rs 5-9 a kg in the wholesale, Sharma added.