Onion exports fall on damage to crop and ban on shipment

Written by Press Trust of India | New Delhi | Updated: May 31 2011, 02:16am hrs
Onion export dropped by over 31% in 2010-11 at 12.89 million tonne as compared to the previous year due to damage to the crop and ban on shipment in the later part following soaring of domestic prices of the kitchen staple.

India had exported 18.73 million tonne of onion in 2009-10 financial year.The sources attributed the dip in 2010-11 to damage to the crop due to unseasonal rains in main producing regions of Maharashtra and Gujarat in October-November last year.

It was also due to government imposing ban on its export since last week of December, 2010 in view of soaring prices of the bulb.

Onion prices had skyrocketed to R70-85 a kg in retail in the national capital and other parts of the country around last week of December 2010 forcing the government to take stern measures including first suspending its export and later prohibiting it completely.

Skyrocketing onion prices had pushed food inflation to a high level with opposition parties making hue and cry over the issue and forcing the UPA government on the back foot.

The ban continued for nearly two months before the government lifted it on February 17, 2011. Sources in the agri-cooperative Nafed, the nodal agency for contracting onion exports, said that the shipment started declining from middle of October last year when the unseasonal rains caused large scale damage to the crops in Nashik region of Maharashtra.

Prior to the ban, India had exported 11.58 lakh tonne of onions mainly to gulf countries, Sri Lanka and Malaysia during April-November of 2010-11 fiscal.

Thanks to a bumper rabi onion crop and lifting of ban on exports, shipment of the important veggie has picked up in the 2011-12 season, Nafed sources said.

While lifting ban, Group of Ministers (GoM) headed by Union finance minister Pranab Mukherjee in a bid to assure against possibility of price shooting again, had decided to allow shipments of onions at a Minimum export price of about R28,000 per tonne.

Owing to high MEP of onion, shipment of the bulb from India dropped to as low as about 10% as compared to last year, a development which helped onion exporters of Pakistan, China and Iran having lower MEP.

Indian onion traders contracted only 27,300 tonne of the root vegetable for exports from February 17 (when thegovernment lifted the ban) to March 23 this year, sources in agri-cooperative Nafed, the main agency for contracting onion export, said.

The country had exported 2.81 lakh tonne of onion during the corresponding period a year ago, they said.

The government slashed MEP of onions other than forBangalore rose onions and krishnapuram onions, to $170 a tonne on March 31, 2011 from $600 per tonne on February 17.