Onion traders cry foul over underpriced exports to UAE

Indian onion exports to UAE at low prices, yielding windfall profits for importers, amid global price surge.

Amid an extended ban on onion exports, farmers and traders are miffed that some shipments allowed by the government to markets like the United Arab Emirates (UAE) have been sold at a pittance, even as global prices have soared, yielding windfall profits for selected importers.

An Indian farmer is being paid just ₹12 to ₹15 rupees for a kg of onions procured for export, but the same onions are then being sold in UAE stores for more than ₹120 per kg, exporters alleged.

Fearing a domestic shortage of the politically sensitive crop, the government had imposed a ban on export of the kitchen staple in December, extending it indefinitely “till further orders” last month. However, it had kept the window open for exports to countries in response to requests received through diplomatic channels.

On March 1, the Union government permitted the export of 14,400 metric tonnes (MT) of onions to the UAE, with a quarterly cap of 3,600 MT. While over 3,000 tonnes of such exports were cleared last month, the Commerce Ministry last week okayed an additional 10,000 MT of onions for the UAE, “over and above” the quarterly quota.

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Usually, global onion prices hover in the $300-400 a tonne range. In recent months, however, rates have soared in major markets like the UAE to as high as $1500 a tonne, exacerbated by the export bans imposed by India, Pakistan, and Egypt.

India’s recent shipments to the country, however, have been sent at around $500 to $550 a tonne, exporters have learnt.