India: Onion exports decline 23% due to high MEP

Onion exports from India declined by nearly 23% in the first nine months of the current financial year as compared to last year mainly due to high price of shipment at $250 per tonne. China and Egypt are dominating the international market by selling bulb at less than $200 a tonne, trade sources said. India exported 10,37,978 tonnes of onion from April to December 31, 2011 as compared to 13,40,772 tonnes during the corresponding period last fiscal, sources in agri-cooperative Nafed, principal agency that grants no-objection certificate for onion export, said.
Lowering of onion export prices to $250 a tonne has failed to perk up its outbound shipment. "Since the price of onion in the international market is ruling at less than $200 a tonne, Indian onion with a higher MEP of $250 per tonne is attracting fewer buyers," Ajit Shah, President of Agriculture Export Association, Mumbai told PTI.

After lifting the ban on onion exports in October last year, the government had kept its MEP initially at a high $450 a tonne. It was first reduced to $350 a tonne and then to $250 a tonne in November, 2011, to make it competitive in the international market. But, onion from China and Egypt are selling at less than $200 a tonne, the Mumbai Agriculture Export Association President said. Except for Sri Lanka and Gulf, the volume of export of Indian onion has dropped to other traditional destinations-- Bangladesh, Russia, Europe and Mauritius, Shah added. R P Gupta, Director, National Horticultural Research Development Foundation (NHRDF) (an arm of ICAR for research on onion and other crop) at Nashik, expressed similar views. Nashik in Maharashtra is the hub of onion production in the country.

Dilip Rao Bankar, Chairman of APMC Pimpalgaon, is in favour of totally doing away with MEP. He said the onion farmers who were earlier elated over a bumper crop are a depressed lot now. Due to bumper production of onion in 2011,the domestic markets are glutted with the root vegetable. Onion markets of Nashik witnessed more than double the arrival of the vegetable in December 2011 at 7,37,486 tonnes vis-a-vis the same period in 2010 when it was 3,58,736 tonnes, Nafed sources said.
Delhi based Azadpur market (Asia's biggest wholesale vegetables and fruits market) also saw flooding of onion in December 2011. Against arrival of 3,60,100 tonnes of onion at Azadpur in December 2011 the figure was 3,20,600 tonnes during same period last fiscal, sources added.

Source: business-standard.com