The prices for onion in India remain high, with no decline expected for a couple of months

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Because onions aren’t available in large quantities in India The prices have increased in the domestic market and aren’t going to decrease anytime very soon, claims Manoj Barai, general manager of Indian fresh food exporter MK Exports: “The onion situation in India is constantly changing due to the unstable weather conditions as well as the prolonged monsoon season that has been observed in various areas of the country. The result has had a negative impact on the time of the arrival of the latest crop and caused supply disruptions as well as price swings. In the moment the prices for onions are excessive and will stay at least for an additional month or two.”

The situation became so difficult it was that Indian government took the decision to intervene. According to Barai the government did indeed have an impact. “The administration initially introduced an export tax of forty percent on FOB value for onions, but later, it was removed. But, the government has implemented a minimum export price (MEP) on onions. The result is that exporting onions has become costlier, which has affected the price of exports. Domestically it has not been a major impact since demand is high, and supply remains scarce which means prices are on the more expensive price.”

What is the reason these onions aren’t in quantity? Barai offers that the climate was the major reason: “The extended monsoon season in India especially in the areas that grow onions, has resulted in severe damage to the onions stored. A lot of open sheds, particularly those in the areas of Nashik that were submerged by the torrential rains that led to the spoilage of large portions of the onions stored. Furthermore, the state’s insufficient buffer stock was not enough to deal with this problem, resulting in the shortage of onions as well as a increase in the price.”

It’s been reported that the market for onion products from India is down. But, onions are one of the most important ingredients in Indian food, and it’s not enough for all local demand, Barai states. “Onion is a key ingredient used in Indian food as well as prominent in all meals. Even with the price consumers continue to buy onions in small amounts than in the past where they’d stock up prior to. Sometimes, those unable to pay for the price might opt to avoid the onions completely.”

“I think that prices for onions are likely to begin to fall in the next month or two. On the domestic front, prices for onions are high but have stabilized and aren’t increasing at a rapid rate, which makes they somewhat more affordable. In terms of exports the price hikes as well as the state-imposed MEP reduced demand for exports. When prices are stabilized onions exports are likely to increase as bulk orders will be restored,” Barai concludes.

More information is available here:

Manoj Kumar Barai

M.K. Exports

Tel: +91-9867635052

Email: mkexports.04@gmail.com

www.mkexports.co.in

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Source: The Plantations International Agroforestry Group of Companies