India’s onion exports received a boost in December, as Bangladesh resumed its position as a major purchaser, following a three-month import suspension.
The Bangladeshi government imposed the import ban to support domestic producers. However, with domestic prices rising in Bangladesh, the Department of Agricultural Extension (DAE) authorized the resumption of Indian onion imports in December.
Market sources reported that by end-November Indian exporters had stockpiled 30,000 metric tons (mt) of onions at the India-Bangladesh border, in anticipation of a resumption of imports, following assurances by importers. When this resumption failed to materialize, Indian producers were forced to sell their stock at reduced prices on the local market as the stockpiled onions started to rot.
Industry participants suggest that had the stockpiled onions been exported they would have expected the stock to sell at about INR 22/kg ($0.24). However, with the ban in place, exporters were forced to sell locally at as low as INR 2/kg, according to sources.
With onion prices spiking in Bangladesh, on December 13, the Bangladeshi government authorized the issuance of 200 import permits per day for Indian exporters, with each permit granted a maximum volume of 30 mt.
Prices for wholesale onion, origin India, ticked up in mid-December, in line with the resumption of exports to Bangladesh, and stood at INR 2,270.04/100kg on December 30, up by 9.74% month-on-month. However, prices are down by 34.78% year-on-year, following a difficult season for Indian growers. With crops hit hard by adverse weather events, particularly heavy rains, crop quality has suffered. Market sources state that not only is the quality poorer, but shelf life has been inhibited, necessitating faster sales.
Image source: Getty
Written by Craig Elliott
