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Onion exports triple over FY16 after govt sales push

Business Standard:  April 11, 2017

Mumbai: Onion exports have almost tripled in 2016-17 following the government’s decision to push sales of the vegetable overseas at higher prices.

The Agricultural and Processed Food Products Exports Development Authority (Apeda) estimates onion exports at 2.39 million tonnes in April-December 2016. Ajit Shah, president of the Horticulture Exporters Association, said 150,000-200,000 tonnes were exported every month thereafter, taking overall onion exports to a record 3 million tonnes in 2016-17.

“The Merchandise Exports from India Scheme (MEIS) was initiated when onion prices were Rs 2-2.5-a kg in the Lasalgaon mandi in Maharashtra. Farmers were not harvesting onion at that price. The MEIS arrested the fall and onion prices recovered to Rs 5-5.50 a kg. This price covers the cost of production, farmers need more to sow onion in the next season,” said Hansaraj Patil, a farmers’ representative in Lasalgaon.

Faced with a sharp decline in onion prices on expectations of a bumper output, the commerce ministry extended the MEIS to onion. The scheme allows exporters to obtain a 5 per cent credit on the free on board (FOB) value of onions.

The MEIS was initiated for onion in August and extended periodically. According to a notification dated March 31, the MEIS benefit will be available till June 30.

India is exporting onions to Sri Lanka, the Far East, the Middle East and other markets where prices are higher than in local mandis. 

According to Apeda, the per unit value realisation for onion in the country was Rs 14,109 per tonne in 2016-17, 36 per cent lower than the previous year’s Rs 22,691 per tonne.

Shah said onion exports would continue till June.

The agriculture ministry estimates India’s onion output six per cent lower at 19.7 million tonnes in 2017-18.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.