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Cheap onion export causing losses, say farmers

Indian onion shipment to UAE have been sold cheap despite high international prices, allowing importers in the Middle East country to make windfall profits at the cost of Indian farmers, traders and cultivators have alleged.

Following India’s export ban, global onion prices have shot up in recent months to about $1200-$1500 a tonne. (HT file photo)

India had allowed shipments of onions to a few countries on priority in response to diplomatic requests, but the world’s largest exporter of the item will continue to ban overseas shipments amid projections of lower output for two years in a row.

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The export ban imposed in December 2023 came on the back of a domestic supply crunch and after a 40% export tax failed to cool prices, which had more than doubled to reach 100 a kilo in some cities.

Also Read: Onion, tomato price surge to blame? Veg thali rises by 7% in March

On March 1, the Union government permitted the export of 14,400 tonnes of onions to the UAE, with a quarterly limit of 3,600 tonne. The commerce ministry last week cleared an additional 10000 tonne for the UAE over and above the quarterly quota.

Indian traders have alleged that while Indian farmers were paid 12-15 a kg for the onions, importers in UAE sold these onions in stores for over 120 per kg.

The Union government has also allowed the export of 50,000 tonne of onion to Bangladesh and 550 tonne to Bhutan, apart from 3,000 tonne to Bahrain and 1,200 tonne to Mauritius, an official said.

Following India’s export ban, global onion prices have shot up in recent months to about $1200-$1500 a tonne. Rates have been pushed high also due to similar bans by Pakistan and Egypt.

“Exports from India however have been sent at around $500 to $550 a tonne, which has caused losses to Indian farmers,” a farmer-trader from a Karnataka farmers’ producer organisation said, requesting anonymity.

Onion shipments to UAE are being channelled through the National Cooperative Exports Limited (NCEL) on a government-to-government basis.

HT has learnt from the NCEL that the pricing and exporting entity are being fixed by an inter-ministerial committee.

Om March 25, the Horticulture Produce Exporters’ Association has written to the NCEL, citing concerns that the prices at which onions are being exported are much lower than ruling international prices.

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