As onions are not in high supply in India, the prices have shot up domestically and they won’t go down any time soon, says Manoj Barai, general manager for Indian fresh produce exporter, MK Exports: “The onion situation in India has been changing frequently, due to unpredictable weather conditions and an extended monsoon season in some parts of the country. This has affected the arrival of the new crop, causing supply disruptions and price fluctuations. As of now, onion prices are still high and are expected to remain elevated for at least another month or two.”
The situation got so bad that the Indian government decided to step in. According to Barai, this did have an effect. “The government initially imposed an export duty of 40 per cent on the FOB value of onions, which was later removed. However, they have now introduced a minimum export price (MEP) for onions. This has made exporting onions more expensive, affecting export prices. For domestic consumers, this action has not had a significant impact, as demand remains high and supply is still limited, keeping prices on a higher side.”
So how come these onions are so low in supply? Barai explains that the weather was the main culprit: “The extended monsoon season in India, particularly in onion-growing regions, has caused significant damage to stored onions. Many open sheds, especially in areas like Nashik, were flooded during the rains, leading to spoilage and wastage of a large portion of the stored onion stock. Additionally, the government's inadequate buffer stock was insufficient to address this issue, resulting in a shortage of onions and a subsequent spike in prices.”
This all meant that export for onions from India has taken a hit. However, the onion is an important product for the Indian cuisine, so there still isn’t sufficient supply to meet all of the domestic demand, Barai states. “Onion is a staple ingredient in Indian cuisine, and its use is prevalent in most dishes. Despite the high prices, people continue to purchase onions, albeit in smaller quantities compared to the past when they would stock up in advance. In some rare cases, those who cannot afford the high prices may choose to skip onions altogether.”
“I anticipate that onion prices will start to decline after a month or so. Domestically, onion prices are still high, but have stabilized and are not rising sharply, making them somewhat affordable. On the export front, the high prices and the government-imposed MEP have dampened export demand. However, once prices stabilize, onion exports are expected to pick up, and bulk orders should resume,” Barai concludes.
For more information:
Manoj Kumar Barai
M.K. Exports
Tel: +91-9867635052
Email: [email protected]
www.mkexports.co.in