Impact of $210 million onion exports on Pakistani consumers

In an unprecedented turn of events, Pakistan witnessed onion exports reaching a staggering $210 million during the period of July to April in the fiscal year 2024. However, this boon in exports came at a significant cost to consumers, who grappled with record-high prices for the vegetable amidst inflation woes.

Waheed Ahmed, the Patron-in-Chief of the All Pakistan Fruit and Vegetable Exporters Association, projected a further surge in onion exports, estimating a potential rise to $250 million by the culmination of the current fiscal year.

Addressing concerns about the surge in exports driving up local prices, Ahmed emphasized that market forces, not export shipments, were to blame for the price surge. He stressed the necessity for price regulation to safeguard consumers from exploitation by market dynamics.

Following an export ban imposed by India from December 8, 2023, to April of the current year, Pakistani consumers faced exorbitant prices for onions, reaching Rs300-350 per kilogram. The lifting of the ban in early May by New Delhi brought some relief, reducing the national average price to Rs70-150 per kilogram.

Despite efforts to mitigate the price surge, including the import of onions from Iran and Afghanistan, local prices remained high. Meanwhile, exporters capitalized on the situation created by the Indian export ban, meeting global demand for onions.

Government intervention

The caretaker government intervened by raising the minimum export price (MEP) of onions to $1,200 per tonne from $750 in January, aiming to protect growers from losses and stabilize local prices. However, this move proved counterproductive for end consumers.

Ahmed emphasized the need for research to develop onion varieties with extended shelf lives to effectively control prices and compete with Indian onions, which boast a longer storage duration.

He highlighted that Pakistani onions have now penetrated markets in various countries, with the government facilitating significant shipments to Far Eastern markets. However, challenges with quarantine regulations in countries like Indonesia, the Philippines, and Thailand hinder further export growth.

Stakeholders urge a concerted effort to balance export opportunities with the welfare of local consumers, ensuring stability and affordability in staple food items like onions.

Read More: Russia warns Pakistan of potential rice import ban

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