India: Red onion sector still suffers from demonetization
However, taking business online is not by definition an answer to these problems. “Exporting through online channels has a lot of risk involved. For one, you can’t really trust who you’re dealing with through online transactions. Suppose I were to order onions of a size 55, fit for the Middle Eastern markets. There is a possibility that I’d end up with a batch of onions that contain sizes that are smaller than that. It would jeopardize our business,” says Khan.
According to Khan, the best way to work is by direct contact with suppliers. This also allows him to buy onions at cheaper rates. He expects the monetary situation of India to restore itself in three to four months.
Four Seasons Exports’ main market for red onions is the Middle East. A lot of countries in this region, like Saudi-Arabia, are currently suffering from an economic recession. Khan currently only trades with clients in Saudi-Arabia he knows personally. As large volumes are necessary to make a profit exporting to the Middle East, there are greater risks involved, especially with the rise of Egypt as a direct competitor in the market for red onions.
For this reason, the company has been focusing more on alternative forms of trade. The company is working with the Spanish market for green chilli peppers, capitalizing on the current low yields of Spanish growers due to adverse weather circumstances.
“We’re working on getting certificates to boost our trade with Spain and other European markets. We’re able to send about 2,000 kg of green chilli peppers per week. Before the Spanish sector got into a slump, prices for chilli peppers were around $700 dollars FOB per 2,000 kg. Because of the supply being so low, this price has risen to as much as $1000.”
Though the Middle Eastern markets have become harder for Indian companies like Four Seasons Export, Khan is still convinced Indian onions have an edge over competitors like Egypt. “70% to 90% of all onions in eastern markets come from India. Also, Indian onions are different. Our main customers in Dubai for instance are hotels. About 20% of all consumers in Dubai are expats. People from India who are working and living in Dubai will always go for Indian onions,” concludes Khan.
For more information:
Irfan Khan
Four Seasons Exports (India)
Mob: 00917-829-206-211
Email: fourseasonexports01@gmail.com
https://www.linkedin.com/in/irfan-khan-661b85a7