Pakistan receives onion export order from Bangladesh after 15 years

KARACHI: Pakistan has received the first onion export order of more than 300 tons from Bangladesh after nearly 15 years of recess following an Indian ban on the vegetable’s outbound shipment to its neighbouring country to avert price hike in domestic markets, sources said on Friday.

An official of Trade Development Authority of Pakistan (TDAP) confirmed that Bangladesh’s Tasho Enterprise finalised deals with a Karachi-based Roshan Enterprise.

“At least 12 containers of onions are being exported to Bangladesh,” the official said. “More would follow.”

India has slapped a ban on exports of onion to Bangladesh due to its local shortage amid floods. Bangladesh imports 700,000 to 1.1 million tones of onion a year and of which around 75 percent was imported from India. The ban caused surge in prices to new heights in Bangladesh, as the market was heavily dependent on Indian supply.

In Dhaka, consumers are being asked to pay 120 taka ($1.42) per kilogram for onions - twice the price a fortnight ago and the highest since December 2013.

The official said Bangladesh is also looking for import options from countries like Turkey, Myanmar and Egypt to meet the demand in the local market. “This (ban) has created market potential for Pakistan.”

The official said the onion trade was also agreed in government-to-government level talks. An exporter believes the export price would be much more viable for Bangladesh considering the current onion price in the market.

“The shipment value from Pakistan would be around $600/ton,” Waheed Ahmed, patron-in-chief of All Pakistan Fruit and Vegetable Exporters, Importers and Merchant Association, said. He said one container carries approximately 28 tons.

Ahmed doesn’t know the exact local onion production, “as the production fluctuates drastically in Pakistan.” “But whenever the crop is good, a significant quantity can be exported without impacting local supply,” he said.

A local trader, however, fears further rise in prices on onion in the local markets as a result of exports.

“The capacity of farmers has adversely been crippled due to waves of price hikes,” the trader said, citing price rise of urea, chemicals and other agricultural inputs.

“In such circumstances, we are importing onions from Iran,” he added. “So, I doubt that (exports) would be a good idea.”

A kilogram price of onion soared more than 150 percent to Rs83 during the last week. Onion prices more than doubled in October over the corresponding month a year earlier. Month-on-month, there was around four percent increase.

A TDAP official said Bangladesh is also considering import of dates, grey fabric and yarn from Pakistani companies.

A government department said trade diplomacy between the two countries generally remained stalled between 2001 and 2006.

“For instance, holding of the Joint Economic Commission between Pakistan and Bangladesh is long over-due,” the Commercial Wing of Pakistan’s High Commission in Dhaka said in a report. The last JEC meeting was held in 2005 in Bangladesh.

Moreover, most of the trade diplomacy and major bilateral agreements were made during the previous governments.

Bangladesh is a very important export destination for Pakistani products ranking amongst top destinations globally and 2nd in Asia for Pakistan after China.

During the current year, Pakistani exports to the market have generally slowed down, owing to non-availability of Pakistan International Airlines’ flights between Karachi and Dhaka.