‘The Hindu’ News : Editor’s Pick 08 April 2024

Editor’s Pick

08 April 2024

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Traders raise concerns over underpriced onion exports to UAE
Amid a centre-imposed extended ban on onion exports, Indian farmers and traders are upset that certain onion exports permitted by the government to markets such as the UAE have been sold at very low prices. This is is even as global onion prices have soared, resulting in windfall profits for some importers.

Exporters have alleged that an Indian farmer is being paid Rs. 12 to Rs. 15 for a kilogram of onions which are then exported and sold in UAE for more than Rs. 120 per kg. The government had imposed a ban on export of onions in December, to avert a potential domestic shortage of the crop. The ban extended indefinitely “till further orders” last month. It, however, kept a window open for exports to countries following requests through diplomatic channels.

In March, the Centre allowed the export of 14,400 tonnes of onions to the UAE, with a quarterly cap of 3,600 tonnes. 3,000 tonnes of onion exports were cleared last month, while the Commerce Ministry last week permitted an extra 10,000 tonnes of onions to be exported to the UAE, over and above the quarterly quota.

Global onion prices are usually around $300-400 for a tonne. Recently, however, rates have soared to as much as Rs.1,500 in top markets such as the UAE. This has been exacerbated by exports bans on onions in India, Pakistan and Egypt.

But, according to exporters, India has shipped onions to UAE at around $500 to $550 a tonne. A leading horticulture produce exporters told the Hindu that UAE importers “have already got windfall gains of over ₹300 crore” through the shipments, and are likely to earn another ₹1,000 with the additional 10,000-tonne quota if the situation persists. This is apart from profits to be gained on the “additional 3,600 tonnes of export quota available for that country till June.”

The exports are being sent via the National Cooperative Exports Limited, which is a government-owned body under the Ministry of Cooperation. Exporters have been informed that these exports were happening on a government-to-government basis, with quotes being allotted to nominated importers by importing country. The procurements for these exports are being done through an e-tendering process on the Agribazaar portal.

However, the importers receiving these shipments in UAE are reportedly private traders and supermarket chains, not government agencies handling food security for the nation.

Typically in trade deals, local exporters of onions are expected to bid for the lowest price they can offer, and buyers are picked on the basis of the highest price offered. This, however, is not the case in this situation.

The Horticulture Produce Exporters’ Association has sough clarity on the export process as well as priced for shipments. It expressed its concerns via an email to the NCEL on March 25 over the fact that onions were being sold abroad at prices lower than the international standard, which was around $1,450 per tonne at the time. In the email, also sent to the Commerce and Consumer Affairs Ministries, the body also noted that the buyers were not government bodies but firms nominated by the government.

The Hindu’s requests for comment to the Ministries of Commerce, Consumer Affairs, and Cooperation went unanswered. A source from the Agriculture Ministry said it was only concerned with providing crop estimates.

Onions have often been at the centre of political storms in India. The bans also prompted protests from local farmers.

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