Dehydrated onions could help arrest onion price rise

At a time when soaring onion prices are burning holes in consumers' pockets, dehydrated onions could be of some help in such a scenario. Dehydrated onion producers believe that increase in consumption of dehydrated onions in domestic markets could arrest onion price rise fluctuations.

 

Of the total annual production of 25,000 tonnes, only a small percentage of dehydrated onions are consumed in the domestic market, that too by 'ready to eat' food makers. "The awareness about dehydrated onions in India is very low, while in western world it is very high," said Vittalbhai Koradia, managing director, Maharaja Dehydration Pvt Ltd.

 

India currently has 75 dehydration units, of which around 65 located in Mahuva block of Bhavnagar district of Gujarat. Industry experts say that nearly 15% of the total dehydrated onions is consumed within India while the rest is exported to various countries such as Europe, America and Russia to name a few.

 

"If the domestic consumption rises to 40 to 50%, it could also help reduce onion price volatility," added Koradia.

 

According to industry players, 10 kg of fresh onions give 1 kg of dehydrated onions as the commodity contains around 90% of water. The 1 kg of dehydrated onions turns into 10 kg when put back into water.

 

"At present, the price of 1 kg dehydrated onions is Rs 150. Going by the industry standard, 1 kg dehydrated onion gives 10 kg when put in to water, the price of the 1 kg onion works out to be around Rs 15 per kg. Dehydrated onions have longer shelf life as compared to fresh onions," explained Koradia, adding, that the business of dehydrated onion is feasible only when fresh onions are procured below the level of Rs 10 per kg as Rs 30-35 is dehydrating cost for the units.

 

Another owner of a dehydrating unit in Mahuva, Bhavnagar M H Chhatariya too agreed with Koradia that there was need to create awareness on the use of dehydrated onions in the domestic market. "There is a need to promote use of dehydrated onion in domestic market consumption of the commodity in local households is very less. It is mostly restricted to big cities," he added.

 

Onion dehydration units, mainly located in Saurashtra regions of Gujarat, operate between the period from February to June. Most of the units start procuring onions from mandis beginning the month of December when arrivals of Kharif onions peak.

 

Spiralling prices of onion is also not a good news for dehydration units as they prefer not to buy onions above Rs 10 per kg. Although, dehydration units mainly cater to export market, China is giving tough competition to India in international market.

 

Azgar Chhatariya, secretary of All India Dehydrated Onion Manufacturers' Association, said that this year most of the dehydrating units had to close processing early as the onion was not available below Rs 10 per kg in the local market.

 

This, Chhatariya said, was because of unseasonal rain and hailstorm in Maharashtra, which is the largest cultivator of onions in India. "This year we had to close down the units early because of high onion prices. Onion above Rs 10 per kg is not feasible for our business. At present all the units except for couple of them are closed," Chhatariya said. According to him about 7,000-10,000 tonne of dehydrated onion was lying in cold storages, which would be dispatched as per order schedule.

 

Chhatariya said that in international market Indian dehydrated onion fetches $2,000-2,500 per tonne.