Lower Pak output to lift onion exports

A combination of lower production in Pakistan and rising demand from West Asia is likely to lift the country's onion exports by a robust 40 per cent to 11 lakh tonne this year from 7.8 lakh tonne last year.

The anticipated higher prices on short supply are likely to jack up the country's realisation from overseas markets by around 29 per cent to Rs 100 crore this year. Rs 72 crore was accrued last year.

At present, onion of Indian origin is quoting in the $190-210 a tonne range in the overseas markets including West Asia, Malaysia, Singapore, Sri Lanka and Pakistan.

"There is a good inflow of demand from Sri Lanka, Singapore and Malaysia as their traditional supplier Pakistan is turning to be onion-deficient," a leading Mumbai-based trader said. "Besides, the quality of Indian onion is much better than that of Pakistan-origin onion, albeit the latter produces bigger-size onions," he added.

A section of traders, however, is apprehensive about a price hike on lower output. Ashok Valunj, director of the Agriculture Produce Marketing Committee (APMC), Mumbai, feels the prices may go little down to the Rs 7 a kg mark.

"Output is going to fall 25 per cent to 52.5 lakh tonne this year from 65 lakh tonne last year. This is because following the heavy showers late season in the country's onion growing regions "� such as the western and the southern "� farmers shifted from onion cultivation to sugarcane and other agri crops," he added.

In APMC, good quality onion is currently selling at Rs 10 a kg, while medium quality is quoting in the Rs 8-9 range. Valunj, however, is hopeful that the prices will rebound towards the end of the season.

Another section of traders was of the view that despite higher export demand on the back of crop losses in the alternative onion producing regions "� including Pakistan, the prices of onion "are likely to remain rangebound to lower in the weeks ahead owing to the beginning of new crop arrivals".

With new crop having started hitting the markets, APMC is witnessing daily arrivals of about 1,000 tonne. However, a trader said, the exact quantum of production could be known only in the first week of April when the current harvesting season ended.

"Of course, we would not like to see a last year-like situation when the onion prices slumped to Rs 2-3 a kg. But one should not be over-enthusiastic about the growing demand in the market as well," another trader said.

The sentiment in the domestic onion market improved two years ago after the government had removed restrictions on the exports and imports of the product.

According to an estimate, the country exported about 0.60 lakh tonne onion to Pakistan last year.