UAE housewives in tears as onion

prices soar
Shortage due to India increasing its export prices to meet domestic
shortfall
By
• VM Sathish
Published Monday, November 22, 2010

An integral part of the daily diet (File)

Onion is causing tears to flow freely in UAE kitchens as price of the most used
vegetable in the world have almost doubled following a recent enhancement of
maximum export price ceiling in India, one of the main sources of onions.

Due to mounting shortage in the domestic market, the Indian government has
increased the Maximum Export Price (MEP) of onion from $375 per tonne to $525
per tonne, an increase of $150 per tonne. Onion price per kilo in India has gone
up from Rs15 to Rs40.
Shortage in major producing countries, unfavourable exchange rate of weak
dollar linked dirham with Asian currencies and the high festival demand are
reasons cited for high onion prices in the UAE market.

Onion is an essential item in the shopping basket of families in the country.

Sidharth Chomal Kamal, Managing Director, Sun Floritech International, fruits and
vegetables wholesale dealer in Al Awir Vegetable market said: "We have stopped
dealing in onions for a month because the prices are very high and the quality of
onions coming to the market has deteriorated. The crop has been affected
by severe rains, causing lower quality onions to come to the market."

He said the shortage was severe two weeks ago and the situation is likely to ease
as Iranian, Egyptian and Saudi onions are coming to the market. "People who use
Indian onions have to switch over to Iranian or Egyptian onions. The retail price
had gone up to Dh2 per kilo and from there to Dh3 per kilo. The minimum cost of
importing onion is now $525 a tonne. The Indian government may further
increase the MEP, if there is shortage in the domestic market."

Abdul Aziz, who runs Abdul Aziz Al Hamadi Cafeteria in Sharjah said it has been a
challenge for eateries like his. "Onions price has been going up for the last couple
of months. The price of a 35-kilo bag went up from Dh35 to Dh75, and most bags
weigh only 30 kilogrammes."

Requiring at least 75 kilogrammes a day for cooking and salads, Aziz said higher
prices cannot be passed on to consumers since the menu rates cannot be
changed. Most of the cafeterias and restaurants in the UAE are facing this
situation.

"Onion prices used to be less than Dh1.5 per kilo, but now it is about Dh4 per
kilo, that too of poor quality produce. I cannot touch some onions with my hands
as there are many spoiled ones in a packet," said Aruna Chakravarthy, an Indian
housewife in Dubai.

In the UAE, onion prices have been going up due to heavy demand during Eid
and the flood-damage to crops in Pakistan. Indian onions exported to Pakistan
also faces the new MEP.

Abubaker Haji, a wholesale onion dealer in the Al Awir market, said the prices in
the Mumbai market has rocketed from Rs800 to Rs4,000 a quintal and traders
are refusing to buy onions at such a high price.

The Agricultural Product Marketing Committee in India said the onion supply has
been low due to post-monsoon rain that damaged crops in Ahmednagar, Nashik,
Satara and some blocks of Pune districts of Maharashtra.