Onion prices climb as export demand soars

KARACHI: Onion prices climbed to a season high with a boost from strong export demand following a bad harvest in neighboring India, dealers said on Saturday.
Price of onion has increased Rs7.5/kg in wholesale markets to Rs45/kilogramme as its demand from foreign customers shoots up, a dealer said on Saturday.
"Onion price peaked at Rs1,900/40kg [in wholesale] yesterday from Rs1,600/kg in the beginning of the last week," said Ahmed Ali Baloch, a dealer at the Karachi's wholesale market located at Super Highway.
The increase in demand and price are being noticed as India and Bangladesh are facing the domestic shortage of the vegetable, which is a main culinary ingredient.
Baloch said at least five shiploads of onions are leaving Karachi Port every week. Each ship carries around 100 containers of the commodity and each container has a capacity of approximately 25 to 26 tons.
He said Malaysia and Dubai are the two leading buyers of Pakistani onion, while Sri Lanka, India and Bangladesh also import the commodity from Pakistan. The increase in price was recorded despite significant surge in its supply from farms to the Karachi's wholesale market, he added.
A local trader Haji Shahjahan said some 140-150 trucks of onion arrived at the market last night as compared to 80-100 trucks arrived in one night about a week ago. "The increase in supply is seen since new production lines were added from other areas of Balochistan."
Shahjahan said India is buying Pakistani onion mostly from Dubai, while Bangladesh is buying it directly from Pakistani exporters.
"Indian is importing Pakistani onion via Dubai because our exporters usually do not trust Indian buyers.
Some trucks are crossing Wagah-Attari border everyday to enter into India territory from Pakistan. Each truck carries around 15 tons of onion, sources said.
Bangladesh imported onion from India, which is experiencing shortage in local supplies and price-hike. The shortage has encouraged Bangladesh to divert its import orders to other countries. Pakistan, Egypt, Iran, and Afghanistan are some of the world’s leading onion exporting counties.
Shahjahan said Malaysia is importing 50-60 containers, UAE 40-50 containers and Sri Lanka 30-40 from Pakistan every week.
"On an average, Pakistan weekly exports 8,000 to 10,000 tons of onion," he said.
He estimated that total export of the country would remain steady at 450,000 to 500,000 tons this year, which is similar to the previous year. The country’s annual export size of the commodity stood at 250,000 to 300,000 tons in recent years.
The country is estimated to produce some 2.5 million tons of onion this year, he said.
He, however, believed price of onion would decline in the weeks to come after harvesting in Sindh.
The province will start harvesting new crop from September-end or October-start. The production will go in full swing in November-December and ended in April 2016.