Farmers and traders in India are discontented with the government's decision to allow limited onion exports, notably to the UAE, at significantly lower prices compared to the prevailing global rates. Despite the extended ban on onion exports aimed at preventing domestic shortages, the government permitted exports to specific countries, including a recent approval for 14,400 metric tons to the UAE. This decision has led to frustration among local farmers and traders, as onions procured for export at ₹12 to ₹15 per kg in India are being sold at over ₹120 per kg in the UAE, generating substantial profits for importers there, while Indian farmers receive minimal compensation.
The global onion price has surged to as high as $1500 per ton due to export restrictions from major suppliers like India, Pakistan, and Egypt. However, India's exports to the UAE have been priced around $500 to $550 per ton, far below the international rates, sparking concerns about significant windfall gains for UAE importers. The exclusive channel for these exports is the National Cooperative Exports Limited (NCEL), with procurement through e-tendering. This scenario has led to allegations of a potential nexus between importers and exporters, manipulating the system for outsized profits at the expense of Indian farmers.
The process and pricing of these exports have raised questions regarding transparency and fairness, with Indian exporters calling for clarity and a market-linked pricing mechanism. The situation has prompted discussions among horticulture exporters and Indian government officials, with suggestions to link export prices to actual market rates and scrutinize the selection of entities involved in these transactions. The discontent highlights the need for a more equitable and transparent system that ensures fair compensation for Indian farmers and aligns with global market dynamics.