Price of Indian onions rise in UAE after export ban

Indian Government banned the export of onions on Sunday and UAE food suppliers have been forced to source the vegetable from elsewhere

Abu Dhabi, U.A.E., July 30, 2018.   Fruits and Vegetable Market at Al Mina.  --  Abdul Kadar Kavgari checks the vegetable order list.
Victor Besa / The National
Section:  NA
Reporter:  Anna Zacharias
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Food suppliers and shoppers in the UAE have been left watery-eyed after a ban on the export of onions from India led to a local shortage.

On Sunday, the Indian Government announced the ban with “immediate effect” after excess rain damaged crops and reduced harvest of the popular kitchen staple across the country.

Earlier, on September 13, the government imposed a minimum export price of $850 per tonne on onions, nearly three times the usual price, but the Ministry of Commerce and Industry has since amended the export policy, making it prohibited until “further orders”.

The move to ban all varieties of onions from leaving the country came in a bid to increase local availability and curb the rising prices of onions within the country, due to the current shortage.

We are charging about Dh2 per kilo but many of our competitors have upped their wholesale price to Dh3, even Dh4, per kilo because of the ban in place

For fruits and vegetables suppliers in the UAE, stocks of the popular vegetable are running low or have dried up all together.

"Our stocks finished last week, so we are now sourcing alternative produce from Iran, China and Pakistan," Aditya Ashok, 32, a purchase manager for Abdulla bin Khater Foodstuff, told The National.

“We supply fresh fruits and vegetables to about 45 restaurants in the UAE and Indian origin onions are one of our most sought after items.”

Importing about 90,000kg of onions from India each month, Mr Ashok said news of the ban was unexpected.

“We were expecting this new announcement to say prices have normalised … instead it was a full ban.

"We are not happy, neither are our customers, many of whom are chefs."

After the September 13 cap on export pricing was announced, Mr Ashok said the buying price of onions increased from Dh1 per kilo to Dh3 due to high demand for the humble vegetable. But his company continued to sell stocks for just Dh2 per kilo at wholesale price.

“We have to maintain good customer relations with our buyers so we didn’t hike the price like others, so it has affected us quite a bit,” he said.

Now, he is buying stock from different countries at Dh3.3 per kilo.

In the first four months of the 2019-2020 financial year, India exported fresh and chilled onions worth more than $154m (Dh565 million) around the world, including to the UAE.

With more than two million Indian expatriates living in the UAE, many consumers from the South Asian communities choose to shop for home-grown produce over local. According to local fruits and vegetables suppliers, onions, tomatoes and potatoes are the top selling items among Indian citizens.

They said the export ban has come as a blow for many, as it is used daily in both household and professional kitchens for many dishes including curries and gravies.

“Indian red onions have a really punchy flavour and they melt into curries really well, so our customers prefer them over any other,” Jasim Ali, manager at Big Fresh, a produce supplier to supermarkets, hotels and restaurants, said.

Mr Ali, 30, said he currently has about four tonnes of Indian onions in stock.

“We are charging about Dh2 per kilo but many of our competitors have upped their wholesale price to Dh3, even Dh4, per kilo because of the ban.”

He said his company usually imports around 7,000kg of onions from India each month, and he expects the current stock to be gone within two days due to high demand from customers.

“Now we are ordering onions from Egypt because transportation costs are lower as they travel by road, not air or sea,” he said.

“Before, Egyptian onions cost less than Dh1 per kilo but now the booking price has gone up.

"We are paying Dh1.5 per kilo and we expect that to rise by next week, maybe to Dh2 or Dh3, because of the ban in India.”

In smaller supermarkets across the UAE, there has been a noticeable hike in the price of Indian onions since Sunday's ban.

At Al Maya supermarket in Dubai Sports City, onions were priced at Dh4.95 per kg compared to Dh3.25 per kg last week. Blue Mart in Motor City increased the price by Dh2, from Dh4 to Dh6 per kg. In Starmart in Dubai Production City, medium-sized Indian onions were priced at Dh5 per kg on Wednesday, compared to Dh3.75 per kg on the same day last week.

A spokesperson for popular home delivery service, Kibsons, said Indian onions are one of its bestsellers online, specifically because they are generally "less watery and more flavourful than products from other origins".

“We have seen an increase in the cost of Indian onions recently but not to extreme levels yet,” David Prokopiak, procurement development manager said.

“We still have stocks available and we will adjust our sourcing accordingly in the near future when Spanish, Pakistani and Egyptian red onions are likely to fill this gap in the market.”

Currently, it is selling Indian onions online for Dh4 per kg according to the website.