Traders criticise minimum export value for onion
Government’s move to set a minimum price for export of onion has perturbed the local exporters.
They held the view that it was not the government’s mandate to declare the value of the good as it would render their product uncompetitive in the global market.
Talking to The Express Tribune, All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association (PFVA) Patron-in-Chief Waheed Ahmed said that despite a bumper yield of onion this year, achievement of the export target seemed far fetched due to such barriers.
Detailing about the obstacles, he said that unrealistic export value of $400 per ton of onion, set by the government, coupled with exorbitant freight charges was restraining the exporters from inking deals with international buyers.
He revealed that his association wrote letters to the Ministry of Commerce and Ministry of National Food Security and Research and urged them to take advantage of the surplus output of the crop.
Ahmed said that the price of onion had been slashed to Rs20 per kg in the local market owing to the bumper yield of the commodity.
Despite surplus production, export of onion was facing difficulties, he added.
He said that the association urged the government to reduce the export value of onion to $300 per ton “in accordance with the ground realities”.
Moreover, acute shortage of reefer containers and higher freight charges were jeopardising the country’s desire to enhance onion exports following a bumper crop, he stated.
Ahmed underlined that his association would have suspended the export of the commodity if the country was facing a shortage of onion, as it had done in the past to stabilise the prices in the local market.
He revealed that currently, around 150-175 trucks of onion –each containing around 12 tons – were arriving in the local market of Karachi daily. He added that the number would multiply in near future.
The prices would further decline in the local market owing to the excess supply, he anticipated adding that if export was not facilitated, then the growers and exporters would sustain mammoth financial losses.
He warned that if the onion exports declined or stopped due to such factors, then growers would suffer the most as they would not be able to recover the cost of harvesting.
“I think $300 per ton export value of onion is quite realistic and the price of onion has declined in the last few weeks,” Sindh Abadgar Board (SAB) Senior Vice President Mahmood Nawaz Shah told The Express Tribune.
Published in The Express Tribune, November 10th, 2021.