With India’s recent decision to lift the ban on onion export, it was expected by many experts and traders, that the market would be reinvigorated, but the reality is starkly the opposite.
Despite the ban lifted from onion export, the prices continue to plummet as demand for onions has greatly reduced. Which is aided by the stark price difference in comparison to Pakistani onions.
As a result, the subdued export demand for Indian ones, has now taken a dive in the domestic market. Being plummeted by over 15 percent within a week.
Factors Behind This Subdued Response
According to the exports, one of the factors behind the hindered export is the notable price difference between Indian and Pakistani onions.
Exporters time and again have declared, that Indian onions are considerably pricier than Pakistani counterparts. Which is estimated to be around Rs.40-45 kg.
Thus, acting as a significant deterrent for potential buyers in the market.
Another reason is the delayed response from the overseas clients, who earlier stocked up then expensive Pakistani onions during the period of India’s export ban.
Thus, the demand for Indian onions continues to remain stagnant, as traditional buyers continue to liquidate existing stocks of Pakistani onions, before going for a new purchase.
Meanwhile, some decisions taken at the policy level, too played a significant role, in the continued subdued response for Indian variety among international buyers.
For example, in order to stabilize the domestic situation, India had earlier implemented, minimum support price of USD 550 per tonne with an export duty 40%.
As a result, these policy interventions continue to deter international buyers to engage at current price levels amidst the prevailing market uncertainties.
Coming to the exporters, they continue to remain apprehensive about their immediate future. However, many remain optimistic that there will be a significant increase in demand in about 15 days.