WASHINGTON: A fall in onion prices in the domestic market has resulted in dehydrated onion exports rising by 30% at the opening of a new production season. The dehydrated onion industry begins fresh production and exports from January every year which goes on till July. Currently, India exports about 300 tonnes of dehydrated onions daily as against 225-230 tonnes per day for the season last year.
Fall in onion prices has resulted in Indian dehydrated onion exporters being able to offer the products at $1700-1800 per tonne in the international market as against $2000-2300 per tonne by competing countries such as Egypt, China and the US. Raw onion prices over the past three months have fallen from Rs 15 per kg to Rs 9 per kg in the wholesale market owing to higher supply.
“The new season has been good this year for dehydrated onion production and exports as domestic raw onion price declined, thereby enabling the industry to offer dehydrated onions at lower rate than our competitors in international markets. The industry is now enjoying almost 30 per cent rise in new business in this season,” said Vitthal Koradiya, president, All India Dehydration Association. Initial trends suggest the industry is anticipating to close the year at 55,000 tonnes of dehydrated onion exports, up from 25,000 tonnes last year.
“This year season has started bit late due unviable price of raw onion in domestic market. Still current price is quite costly for us but we are expecting it will decrease more once Rabi onion arrives in the market from March,” Asgar Chhatariya, managing director of Chhatariya Foods Private Limited. During the season in 2015, dehydrated onion exports had shrunk to 25,000 tonnes from 48,000 tonnes in 2014 due to high raw onion prices.
“With the domestic price of raw onion becoming unaffordable for the dehydration, export and production both had fell down to almost half last year. However, this year we are expecting dehydrated onion exports to be about 55,000 tonnes,” said Chhatariya.
India produced about 35,000 tonnes dehydrated onion in 2015, of which 25,000 tonnes was exported, and domestic consumption accounted for about 5,000 tonnes. The industry still has about 5,000 tonnes in inventory, which it expects to clear as soon as demand from major buyers such as Russia, Germany and other European Union countries picks up by March.
“Earlier, on expectation of further fall in prices major buyers reduced demand for bulk orders. We are anticipating that wholesale price will decline to below Rs 7-8 per kg in domestic market as new crop arrivals increase. By March end, daily export may reach to 500 tonnes,” said Koradiya.
Industry sources say 9 kg of fresh onions gives 1 kg of dehydrated onions, as the commodity contains around 90% water. However, when put back in water, one kg of dehydrated onions absorbs the liquid and goes back to being 9 kg again.
Out of total 75 onion dehydration units in India, 60 units are in Bhavnagar area of Gujarat. Currently, 20-25 units are running at full capacity while the industry anticipates that all units will be operational in full swing by end of February.
