Onion exports to lose sheen on MEP rise

India is likely to lose onion exports markets because of frequent rise in minimum export price (MEP). The latest round of MEP hike, announced on Monday, by $100 to $445 per tonne is more than double prices offered by China and Pakistan at $200 per tonne to East and West Asian traders where there is a huge exports potential.

Indian exporters do not enter into long term contract with overseas buyers because of uncertainty over price revision. Hence, exports are done on spot shipment basis.

"India has already lost Malaysian, Indonesian and Sri Lankan markets completely. There is little hope for West Asia which will surely go to China and Pakistan for cheaper alternatives", an exporter said.

India's onion exports declined by 27.79 per cent to 2.78 lakh tonnes till July 28 in the current fiscal, against 3.85 lakh tonnes in the same period year ago.

The debacle in exports is mainly attributed to high prices quoted by agencies, besides stiff competition from Pakistan and China.

Of the 13 nominated agencies for onion exports, the National Agricultural Cooperative Marketing Federation of India (Nafed) contributed over 1 lakh tonnes, sources said.

Meanwhile, onion price slipped Rs 2 per kg on Tuesday in Agriculture Produce Marketing Committee (APMC), Vashi, to settle at Rs 17 per kg on huge arrivals.

The commodity price had recorded a 12 per cent rise during a week ending Monday.

Vashi APMC recorded a total arrivals of 140 trucks of 10 tonnes each on Tuesday against the normal sales of 80 trucks. Today, about 50 trucks of Grade I onion is still awaiting buyers' attention.

Traders were expecting a further price rise in the domestic retail market on anticipation of lower supply. "Had the government not intervened timely, the price would have gone up to Rs 25 per kg," a local trader said. But, now the price would ease for sure before taking another leap when crop size becomes clearer in September, he added.

Although demand has been very strong in the domestic market, the overseas traders are abstaining from Indian buying.