Pakistan has emerged as a dominant player in the global onion market, challenging India's traditional position. The price point of Pakistani onions is set at $170 per ton (cost and freight) in markets such as Sri Lanka, contrasting with Indian onions priced at $330. According to industry insights, "There's less demand for Indian onions right now," remarks M Madan Prakash, Director of Rajathi Group.
The competitive edge for Pakistan is due to a larger onion harvest this year and the weaker Pakistani rupee at approximately $1=282.94 compared to India's $1=85.42. China's new onion crop enters the market priced at $250 per ton, gaining traction among global buyers. "Fresh crop, better appeal," notes Shah. Export restrictions in India have allowed global buyers to shift preference to competitors.
Additionally, Iran and Egypt have intensified the competition in the onion sector. A temporary spike in Indian demand arose from Gulf supply concerns related to the Israel-Iran conflict, but this has subsided with the conflict's resolution.
The Indian government's imposition of a 20% export duty, intended to stabilize domestic prices, hindered exports. This duty will remain until April 1, 2025. Suvarna Jagtap from Lasalgaon's APMC states, "Those restrictions crushed our shipments." The premium Rose onion, previously popular in Europe, is also facing challenges due to Myanmar's increased production.
Domestically, India's 2024-25 crop is projected to produce a surplus of 307 lakh metric tons (30.7 million metric tons). Consequently, local prices are affected, with the best quality fetching around $0.17 to $0.19 per kg, marking a decrease from the previous year's rates. "Arrivals are strong, but prices are under pressure," says Vikas Chaudhary of Nashik's VDI.
Onions remain a sensitive political issue in India, impacting farmers' earnings and the rural economy, potentially influencing electoral outcomes.
Source: Bhaskar English
