Indonesia's move to lift a ban on onion imports from the Netherlands has begun to hurt the prospects of Indian white dehydrated onion exports.
Indonesia had banned Dutch onions on 2009 when consignments were found to be infected with stem nematode, a destructive pest. The ban was imposed as part of Jakarta's zero tolerance policy against such plant pathogens. The ban was lifted on April 18.
Indonesia is a prominent buyer of Dutch onions. When the ban was imposed, its processors, who make powder, turned to exporters in Maharashtra and Gujarat, according to trade sources.
The white onions have to be dehydrated before being exported.
“Dutch exporters are offering their produce at a competitive price,” said Mr Rupesh Jaju, Director of United Pacific Agro Pvt Ltd.
Dutch dehydrated onions are offered at around $340-50 c&f against $300 c&f quoted by India.
Still, Indonesians prefer the Dutch produce because of its quality.
“The quality of the Dutch onion is obviously better. It has a higher shelf life compared to the Indian produce,” said a trade source.
A higher shelf life means, buyers can store the produce and use it as and when they need. It will also make economical sense since inventories will be built up when prices rule low.
The other problem is that Indian dehydrated onions tend to lose 8 to 10 per cent of their weight during trans-shipment. This is not the case with the Dutch onion as their dehydration process is superiod.
With the ban being lifted, Indian dehydrated onions are at the receiving end.
“We are feeling the effect of Indonesia lifting the ban on Dutch onions,” said Mr Jaju.
Nematodes
Indonesia lifted the ban on the Netherlands onions after Dutch exporters worked on treating the nematodes. The treatment was done in coordination with the Netherlands Ministry of Economic Affairs, Agriculture and Innovation suiting Indonesian requirements.
Dutch onions were treated with maleic hydrazide for the nematodes.
The Dutch have been encouraged by the demand for quality produce from Indonesia where buyers are reportedly ready to pay better prices.
Also, the peak demand season in Indonesia corresponds with the arrivals season in Holland.
Ironically, dehydrated onion exporters were badly hit when the Centre banned onion exports in December.
The ban was lifted in February but the Centre fixed a minimum export price of $600 a tonne. Since then, the floor price has been cut quite a few times to $170 now.
Exports of dried and preserved vegetables during 2009-10 totalled 1.24 lakh tonnes valued at Rs 532 crore.