India's onion exports are caught in a perfect storm of March rains ruining quality and war-driven freight costs spiking fivefold to the Gulf, but production is holding up, and government intervention could steady things soon, says Kiran Gandurde, co-founder of Matoshree Fresh Foods in Nashik. "There will be minor problems in exporting because of the weather impacted quality, so grading has stepped up to ensure importers do not get upset."
The pink Garwa variety harvested right through May bore the brunt of last month's downpours. "Nashik output dropped 2-5% from last year, but Solapur and Pune made up for it, keeping the total production even. The domestic market is currently flooded with lower grades now, while farmers and traders stock up on the good stuff, betting on better prices ahead," Kiran explains.
Arrivals are ramping up, with export-grade onions at a harvest-low of USD 0.11-0.16 per kg. "That's typical for this slump until Maharashtra supply edges out Rajasthan and West Bengal. Rain warnings for late April could yet spoil unharvested crops, flooding markets with more rejects."
© Matoshree Fresh Foods
Shipments to Asian destinations continue without any hiccups, Kiran mentions. "Weekly loads to Malaysia and Vietnam keep cash flowing. But Gulf exports to Oman, Qatar, Saudi Arabia, Bahrain, and Dubai still remain crippled by the Iran-US conflict, with container rates to Jebel Ali port leaping from USD 2150 to USD 8600-9700."
Even without rain, farm prices might nudge only slightly higher. "Last year was the same pattern, with prices spiking to USD 0.17-0.22 once government agencies stepped in. Traders in Nashik are stocking high-grade onions, eyeing mid-May intervention when government agencies buy stocks at 50% above market to control prices. They won't export, just control the domestic market."
New exporters aren't trading at the moment; it's only the regulars who are shipping and grinding through Gulf export challenges and weather woes. "Typically, we have the Government stepping in post-April, and that's when prices firm up, and exporters breathe easier."
For more information:
Kiran Gangurde
Matoshree Fresh Foods
Tel: +91 92 73 683 400
Email: [email protected]
