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Falling onion prices might have brought tears to farmers but the commodity has given dehydration units a reason to rejoice. Lower commodity prices have resulted in increased global competitiveness of dehydrated onions, doubling exports from the country.
Dehydrated onion exports have gone up from 12,000 tonnes to 25,000 tonnes on a year-on-year basis during the January-May period. Industry sources said thanks to low prices in domestic market, prices of dehydrated onions from India have dipped by $700 to about $1,800 a tonne this season.
“Onion prices in the local market have come under pressure due to higher production and this has enabled Indian dehydrated onion producers to offer their products at competitive rates in the international market. The prices are in our favor and business has grown over doubled in this season,” said Vitthalbhai Koradiya, president, All India Dehydration Association and managing director of Maharaja Dehydration.
The industry expects to export around 50,000 tonnes in 2016. Due to high onion rates, India had exported about 30,000 tonnes of dehydrated onion in 2015. Currently, in wholesale markets, onion prices are ruling at Rs 3-7 a kg, which was Rs 12-15 a kg last year at this time. Onion production has gone up to 20.3 million tonnes in 2015-16 against 18.9 million tonnes in 2014-15.
Asgar Chhatariya, managing director of Chhatariya Foods, said, “As on date, the prices of raw onion are in our favour and if we can maintain our prices at $1,600-2,000 a tonne, total exports might touch 50,000 tonnes by the end of December this year.”
India mostly exports to Europe, Russia, the US and some African countries as well. Most of the export business comes during the January-June period and after the first rain, dehydration units close till November every year.
Chhatariya said, “Dehydration units are preparing to shut down their units as monsoon is about to come. By the end of June, almost all units will close their doors and do a business on stock they have for the next few months.”
There are about 90 onion dehydration units in India. Of this, nearly 75 units are located in Gujarat while the rest are spread across Maharashtra and Madhya Pradesh.
While the onion dehydration industry is enjoying growth on the export front, it is not expecting any revival in domestic consumption of dehydrated onion. For the past couple of years, domestic consumption of dehydrated onion has limited to around 5,000 tonnes. The industry is expecting the same this year, too.
Koradiya said, “We are trying to create awareness, but despite our constant approach, domestic consumption of dehydrated onion is not increasing and is limited to about 5,000 tonnes.”
In India, people prefer to use fresh onion. Dehydrated onion products are consumed by hotels, caterers and ready-to-eat food makers.
