Monday, January 24, 2011

Fall in onion price

By Saleem Shaikh

January 17, 2011

ALTHOUGH onion exporters, traders and growers have been hit by partial ban on export to India, consumers have heaved a sigh of relief after significant decline in the retail prices of the commodity across Sindh.On January 4, the government banned export of onion to India via land route but, yieldeding to exporters’ pressure on January 12, allowed them to honour their contracts reached before the ban and send their consignments to India through Wagah.
While traders wanted withdrawal of the ban, officials in the federal commerce ministry saw dim chances of any such thing to happen.
Officials argue that the country was hit by low onion output and the new crop was not expected in local markets from Punjab before March. Export at this pointof time would escalate onion price in the market.
“The ban has been imposed in view of the possible onion shortage in local markets because of low output in Sindh and Balochistan as tens of thousands of acres under onion crop was washed away by floods,” remarked a Minfal official.
According to market reports, on January 4 some 300 truckloads of onion were stopped at the Wagah border from entering India.
Saud Khan said 300 trucks, stuck up at Wagah border, were each loaded with some 300 maunds of onion. The exporters estimate that the value of their held uponion at the Wagah border is at around Rs140-150 million. The vegetable exporters who procured the onion at around Rs2,100-2,200 per maund from thegrowers would have suffered hefty financial losses, if their consignments of surplus onion were not allowed to enter India, he remarked.
However, the relaxation was only for the orders for which the letters of intents were issued and exporters had received money from India.
“The impact of the ban has already been felt in Nasarpur, the country’s largest onion producing area. The onion prices have sharply declined by about Rs800 per 40kg in the Nasarpur wholesale market. Prior to the ban, the commodity was trading at Rs2,200 per maund,” said Nabi Bakhsh, an onion trader in Matyari district.
The exporters also maintain that there was an abundant quantity of onion in excess of the domestic market demand which they wanted to export.
But Abdul Waheed Ahmad, former president of the All Pakistan Fruit and Vegetable Exporters, Importers and Merchant Association, has highlighted another side of the story. He said that the quality issue is also the cause, which prompted the ban.
“There are reports that the growers harvested pre-mature onion crop for sale to exporters, which is destined to rot and be rejected by the Indian traders once it reached across the border market,” he remarked.
Waheed told this scribe on phone that the onion export was continuing through the sea and air routes to India and export target of 600,000 tons would be easily achieved.
Meanwhile, the ban on onion export has brought down the prices of the commodity which had peaked in December last year because of low crop output in the provinces.
Onion which was selling above Rs70-80 per kg in September last year, was now selling at Rs20-25 per kg in retail markets.
The retail and wholesale vegetable traders say the prices are likely to fall further to as low as Rs15 per kg when new onion crop will arrive from Punjab in March.
High prices of onion during November-December last year led to reduced consumption, and its sale declined significantly in the domestic market, recalled Ali Ahmad Shah, a vegetable trader at the Sabzi Mandi in Karachi. “But now its sale has improved and is increasing day by day, thanks to a significant fall in prices following the ban,” he noted.

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