- India bans export of onions
- Prices go up in the UAE
- Is the Indian monsoon to blame?
Worried about your household budget? Indian onion prices in the UAE are rising and most people in the UAE consume them. Gulf News investigates what's causing this problem?
Apparently, it all started with, when in a bid to control the soaring prices of onions in India, the country's government banned its export with "immediate effect" from this Monday (September 29), till further orders.
The Indian government also imposed limits on the storage of onions within the country. It will be a crime now to store more than 100 kilograms of onions for any retail trader in India.
So, why did India ban the export of onions?
It did so to create more domestic supply and curb rising prices, which have doubled since July. The current increase in onion prices is a fallout of last year’s drought and the delayed Indian monsoon this year. To add to the woes, some onion-growing areas have reported excessive rain, and the harvest period was delayed by a week or so.
The Indian states of Maharashtra, Karnataka, Gujarat, Madhya Pradesh, Rajasthan, Bihar, Uttar Pradesh and West Bengal account for almost 90 per cent of onion production in India. And these are some of the states worst hit by the excessive rain this year, which was apprently 25% over previous monsoons. Great news for ground water reserves, but not so much for farmers whose yields have suffered severe rain damage.
Currently, retail onion prices within India are ruling at around Rs60-80 (Dh3 - 4) per kg due to supply disruption from flood-affected growing states like Maharashtra and Karnataka.
Onions are a fundamental part of the Indian diet, across states and social stratas, from the poorest to the wealthiest. This means, there is always a steady demand for them through the year. The country is one of the top five exporters of onion, along with China, The Netherlands, Spain and Mexico.
Indian onion exports were valued at over $496 million (around Dh1.8 billion) in the 2018-19 financial year. As the supply within India dwindled, the government decided to take some drastic measures. The Directorate General of Foreign Trade (DGFT) on September 13 set a high minimum export price of onion at $850 per tonne (about Dh3,122.05 per kilogram), to discourage foreign buyers of Indian onions.
Exports below minimum export price (MEP) to Bangladesh and Sri Lanka were also stopped. Strict action would be taken against violators, the Indian government announced.
When that seemed to not have the remedial impact expected, they went ahead and placed a ban on the export of onions.
Indians react on Twitter
Many Indians took to Twitter to react to their government's decision asking if the lawmakers were aware how it is making things worse for Indian farmers.
@shantpre posted: "Banning of onion export is precisely the kind of decision the government should avoid. Market manipulation is what sabotages the functional efficiency of free markets. Eastern Europe along with other countries, which embraced communism and socialism have proved this beyond doubt."
And, @hemanda_kumar posted: "Onion export banned! When a farmer gets an opportunity, the government restricts it and for businessmen they give incentives in the form of discounted tax. Farmers should remain poor. Policy is same - congress or bjp."
Why does the onion shortage in India matter to the UAE?
It means the cost Indian onions have gone up in the UAE, as Bangladesh, Sri Lanka and the Emirates are the top three destinations for Indian onion exports.
Prices of Indian onions in the UAE are expected to rise after this move, vendors at Dubai’s Al Awir Central Fruit and Vegetable Market told Gulf News on Monday.
They said stocks of Indian onions, popular with consumers from the Indian subcontinent, will run out unless replenished by exports, causing a shortage of Indian onions and a price hike.
Indian onion prices have already increased by around Dh1 to Dh3.50 per kg on average.
Mehmood Thayyullathil is in charge of Al Rayan Supermarket in Al Barsha area, Dubai. He has seen a sharp rise in prices of Indian onions that are sold at his grocery store in the last two weeks.
“I used to buy a carton of 20 kilograms of Indian onions for 30Dhs, now it’s more than double, it’s over 70Dhs,” the Indian national said.
I used to buy a carton of 20 kilograms of Indian onions for Dh30, now it’s more than double, it’s over Dh70
Thayyullathil said that he has not seen such a rise in prices of onions in recent times. A designated driver buys vegetables in bulk from Al Aweer Central Fruit and Vegetable Market and it is sold at the supermarket.
“I don’t have control over the prices, it depends on the price it’s being sold at in Al Awir,” he added.
Speaking about whether people have stopped or avoided buying onions, he said: “Onions are sold by the minute at the supermarket, people use it so much daily, I have not noticed a decrease.”
Huma Arshad, is a Pakistani housewife based in Sharjah. She added that she, too, has witnessed an increase in prices of onions and had to add that into her monthly budget for food items.
“I buy all the groceries along with my husband from a hypermarket nearby, and we saw a rise in the prices of Indian onions,” she said.
Arshad said that she chooses to go to bigger stores to get a better deal but that has not been working, in terms of what she pays for onions, in the past month.
I had read in the news about India banning the export of onions, I did not know it would affect prices everywhere so much and so quickly
“I had read in the news about India banning the export of onions, I did not know it would affect prices everywhere so much and so quickly,” she said.
Speaking about how much the prices have increased in her experience, she said that she is paying almost double for a kilogram of onions than she used to, three weeks ago.
She also said that if it continues, she might have to switch to other sources. “In the UAE, we are lucky. We can buy produce coming from many countries. If it [prices] continues to rise, I will think of switching to other types of onions,” she said.
Filipina homemaker, Elizabeth Luzung, said: “The cost of onions will get more expensive as there will be shortage and that’s the basics of economics of demand and supply. For one kg of red onions, it costs me around Dh4 from a grocery, but it will shoot up ...."
Indian onions are soft, smooth and spicy. White onions are sweeter, so I always use red Indian onions as they are more palatable to my taste buds
Every morning, Luzung prepares breakfast for the family in Dubai and onion is a must as a basic ingredient for cooking. She said: “I always use onions in my omelette every morning and in all the food that I cook to add flavour, and I think it’s the basic ingredient to be had in any viand, even for salad and sandwiches. I also add onions to add flavour to condiments like vinegar and soy sauce, which is perfect dip for fried fish."
Luzung prefers to use Indian red onions compared to white onions. She said: “Indian onions are soft, smooth and spicy. White onions are sweeter, so I always use red Indian onions as they are more palatable to my taste buds.
Onions is a must ingredient whenever I cook to add distinct flavour. If India bans export of their onions, then it will affect my budget since I always use onions in all my foods, although they're cheaper, the impact will be realised in the long-term. I prefer Indian onions because of their distinct flavour and pungency
Another affected expatriate is Mohammad Waqas from Pakistan. He said: “I have been working in Dubai for three years and I am fond of cooking even back home. Onions is a must ingredient whenever I cook to add distinct flavour. If India bans export of their onions, then it will affect my budget since I always use onions in all my foods, although they're cheaper, the impact will be realised in the long-term. I prefer Indian onions because of their distinct flavour and pungency."
Yes, it will impact my budget. I prefer Indian onions ... so it will inflate the cost of household a little, and it is the most common vegetable and high in use ... in Indian cuisine
Indian expatriate Mohammed Affan Atiq has been in Dubai for three years. He said: “Yes, it will impact my budget. I prefer Indian onions as they are comparatively cheaper than other onions, so it will inflate the cost of household a little, and it is the most common vegetable and high in use and it is good quality. Onions are an integral part of Indian cooking. Apart from being very high in antioxidants, they also form the base for many gravies in Indian cuisine."
But, one thing they're all clear on is that they will not be stopping to use onions, perhaps just reduce usage to some extent to manage budgets.
The origin story of onions
While that is debatable, one thing is for sure, onions have been around for many years. According to US-based website onions-usa.org, onions originated in central Asia, but some research even suggests that it was first grown in west Pakistan.
Onions grew in Chinese gardens as early as 5000 years ago and are even referenced in Vedic writings from India that goes back to 500BC. It was one of the earliest cultivated crops because of their durability and transportability.
The benefits of red onions
While onions come in different colours, red onions, also known as purple onions, are popular in India and are among the cheapest onions exported to supermarkets across the world.
So an onion crisis in India, affects everyone, especially when red onions have several health benefits.
According to a website vegetablefacts.net, onions are considered superfoods and have high content of vitamin C and antioxidants. They also help boost your immunity and digestive system.
The article stated: “Red onion contains at least 25 different anthocyanins. Red onions are also more effective natural blood thinner than white onions because they are richer in flavonoids, which help thin the blood.”
Who eats the most onions?
According to a report by UK based broadcast channel BBC, the United Nations estimates that at least 175 countries produce the crop, and is considered a global ingredient in food.
The article said: “China and India dominate production and consumption - between them they account for about 45% of the world's annual production of more than 70 million tonnes.”
Onions are used in many dishes that come from South Asia. According to online research, Libya has the highest consumption of onions, with a per capita consumption of 66.8 pounds. Many West African countries also use onions in food.