Pricey exports fail to bring down onion rates

KARACHI: An increase last week in the minimum export price (MEP) of onion from $750 per tonne to $1,200 per tonne has failed to bring down prices in the local market as consumers continue to pay Rs 220-240 per kg for the commodity.

Exporters reported to have forced the Ministry of Commerce (MoC) to fix a higher MEP to control rising prices and provide some incentive to growers. However, both the tasks appeared to have failed so far.

A retailer at Water Pump, Federal B. Area said onions from Balochistan and Sindh were available at Rs 240 and Rs 220 per kg, respectively.

He added a better export quality is being sold at Rs 250 per kg in the wholesale market.

When India imposed a ban on onion exports on Dec 8, onion in Karachi was available at Rs 150-180 per kg.

Demand and price are also high in various countries which have been dependent on Indian onion imports. As a result, costly Pakistani onions are also fetching a handsome price in these markets.

Many exporters had already hoarded onion to make a windfall to cash in on India’s ban on export.

Amid thriving exports to earn foreign exchange, some traders are bringing onions from Afghanistan and Iran to meet local demand, causing an additional burden on precious foreign exchange.

The only beneficiaries currently are exporters instead of consumers who are paying higher prices for imported onion amid a lack of quality and taste compared to Pakistani onion.

Biggest loser

Traders believe that growers are the biggest loser as exporters and market forces had made bulk purchases of onion from growers for hoarding purpose. Besides, local traders who had procured onions at low rates from growers are pocketing higher prices from consumers.

“The government should impose a ban on export for 10-15 days as this is the only way to curb skyrocketing prices of onion,” Haji Shahjehan, the president of Falahi Anjuman Wholesale Vegetable Market, said.

“If the Indian government can impose a ban on its exports to provide relief to the consumer, why can’t Pakistan do so,” He wondered. Instead of any ban, the government had raised the MEP, he added.

Mr Shahjehan said the wholesale price of onion varies between Rs 150 and Rs 200 per kg and big exporters, who also have firms and companies in various countries, have no problem in lifting costly and high quality onion varieties for export.

Some big players are fully cashing in on India’s ban by lifting high-priced quality onions for making huge shipments.

He said the onion crop from of Sindh was arriving in the market and wet onion, or premature variety, is finding its way into the market as traders want to make a quick buck due to rising prices.