Dip in Pakistan’s onion exports to benefit India, China

ISLAMABAD - Indian and Chinese onion exporters will get a major share of the global onion market this year as Pakistani exports are set to drop due to extensive damage to the crop caused by the heavy rains in the country, say experts.

Heavy rains at the time of sowing have damaged the crop severely in the interior parts of Sindh and Punjab (provinces), which means that surplus crop is not available, the country’s leading exporter Aslam Pakhali said, adding that the onion prices are likely to increase substantially in the local market as well.

There has been a $100 increase in prices of onion per tonne (from $300 to $400) in the international market as compared to last year. This situation would benefit both India and China, he said.

Pakistan exported a record 45,000 tonnes of onion in the previous financial year, but it is likely to drop to 20,000 tonnes (less than 50 percent) this year, says the Pakistani daily Express.

China has specially produced red onion for bulk export, which is being sold at $370 per tonne, says Pakhali.

Onion is being sold in the local market at as high as Rs.1,200-1,400 ($24/28) per 40 kg, he pointed out, adding that the traders did not import onion to address the shortage because of high sales tax.

There is 19 percent sales tax on the import of onions which does not make it a feasible option for the local market, he argued, adding that affordability of imported onion can be ensured only if the government decided to give some relaxation in the sales tax ratio.

The country used to export 30,000-35,000 tonnes of onion at an average annually, said Pakhali.

He, though, observed that the damage caused to onion crop this year is not as much from floods as it is from heavy rains.