High Onion Exports Lead to Increased Consumer Prices

Unprecedented onion exports generated $210 million during July-April FY24, but this came at the expense of consumers grappling with record prices for the vegetable.

“All Pakistan Fruit and Vegetable Exporters Association Patron-in-Chief Waheed Ahmed estimated that onion exports could reach $250 million by the end of the current fiscal year,” dismissing concerns that higher exports were driving up prices of the country’s primary staple.

Following India’s export ban from December 8, 2023, to April this year, Pakistani consumers faced prices ranging from Rs300-350 per kg for onions. However, after New Delhi lifted the ban in early May, the national average price dropped to Rs70-150 per kg.

“The surge in prices cannot be attributed to export volumes. It is the responsibility of the price regulator to curb consumer exploitation by market forces,” stated Mr. Waheed. He illustrated that “if the wholesale price of onion is Rs150 and retailers charge Rs300, then exports cannot be held accountable for local price hikes”.

Total vegetable exports amounted to 1.044 million tonnes, fetching $371 million in 10MFY24 compared to 1.171 million tonnes ($262 million) during the same period last fiscal year. “This indicates that exports, including onions, achieved an average price per tonne of $354 versus $233 in the previous period, thanks to stable rupee-dollar parity since September 2023.”

“The share of onions in overall exports is 200,000-225,000 tonnes, with potatoes and other vegetables comprising the remainder,” claimed Mr. Waheed.

Despite local traders importing Iranian and Afghan onions to meet demand, prices remained high. Nonetheless, exporters capitalized fully on the situation created by the Indian ban to fulfill global demand.

In the second week of January, the caretaker government raised the minimum export price (MEP) of onions to $1,200 per tonne from $750. This decision, requiring 100% advance payments, aimed to protect growers from losses and lower prices in the local market. However, it proved counterproductive for end-users.

“We must conduct research to develop improved onion varieties with longer shelf lives to effectively manage prices and compete with Indian onions, which have a shelf life of three to four months compared to one month for local onions,” suggested Mr. Waheed.

He noted that Pakistani onions are now available in many countries for the first time, with the government sending significant shipments to regular Far Eastern markets.

“Our onion exports could expand further if quarantine issues with Indonesia, the Philippines, Thailand, etc., are addressed,” he added.

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