Onion exports have resumed after a gap of two months with Malaysia buying the bulb from Gujarat. The export volume is expected to pick up once kharif onions’ arrival peaks in a couple of weeks time, exporters said. 

“We have got orders to export onions from Gujarat. These are pickle onions that can be used instead of Bangalore rose onions (shallots),” said M Madan Prakash, President, Agricultural Commodities Exporters Association (ACEA).  Prakash’s Rajathi Group exports agricultural commodities including onions.

Gujarat onions are used for pickles and are seen as an alternative to Bangalore rose onions. “Bangalore rose onions are quoted at $1,300 a tonne,” he said. 

This is because early kharif arrivals are over in Karnataka and late arrivals in Krishnanagar are expected next month. “Then, prices could drop to as low as $800/tonne,” Prakash said.

The Rajathi group has quoted a competitive price for the Gujarat onion, the ACEA president said, without revealing the exact quote. 

“Domestic prices are currently higher and as a result, we are not competitive. Our prices are above $700 a tonne,” said Ajith Shah,  President, Horticulture Produce Exporters Association (HPEA).

Currently, the modal price (the rate at which most trades take place) in Lasalgaon, Maharashtra’s Nashik district, is ₹5,651 for onions harvested during April. The modal price of kharif onion is ₹4,500 a quintal.  

Kharif onion’s modal price had increased to ₹4,600 a tonne on Wednesday, while for onions harvested in April it was ₹5,700. Onion prices are ruling at a five-year high. 

“Onion prices have increased as rains last month delayed the harvest. Kharif onions should have arrived around Diwali. It will now arrive around November-end and prices will begin to drop sharply as the crop this year is high,” said Shah. 

“The quality of this year’s kharif onions is good. Arrivals are expected to gather pace next week,” Prakash said. 

Drop in output

According to the Crop Weather Watch Group, an arm of the Ministry of Agriculture, kharif onion was sown on 3.82 lakh hectares compared with 2.85 lakh hectares a year ago.

The other reason for onion prices to soar is a 6 million tonnes (mt) drop in the 2023-24 production. The Ministry of Agriculture estimated the production for the 2023-24 season, which ended in June, at 24.24 mt compared with 30.02 mt in 2022-23. 

Onion production in 2022-23 was affected by prolonged dry weather due to the impact of El Nino, which results in drought in India. El Nino emerged in June 2023 and ended in April this year. 

This year, monsoon rains have been beneficial to the onion crop across all growing States.  Even during 2021-22, the onion crop was affected by unseasonal rains during October-November. 

Due to lower production, the Centre initially banned exports. However, in May it lifted the ban and imposed a minimum export price (MEP) of $550 per cent and 40 per cent export duty. 

The MEP was scrapped in September and the export duty halved to 20 per cent. 

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