Recent developments indicate that onion prices in the UAE are poised to decrease by up to 20 per cent as India has resumed exports of the commodity after a three-month ban. Here’s a summary of the situation and its implications:
- India’s Export Ban and Resumption: India, the world’s largest exporter of onions, had imposed a ban on shipments until the end of March 2024 due to rising prices in the local market following poor rains. However, earlier this week, New Delhi allowed the export of 64,400 tonnes of onions to the UAE and Bangladesh.
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- Export Details: India’s Ministry of Commerce announced that 14,400 tonnes of onions would be exported to the UAE through the National Cooperative Exports Ltd (NCEL), with a quarterly quantity ceiling of 3,600 metric tonnes.
- Impact on UAE Market: The ban on Indian onion exports had led to a significant increase in onion prices in the UAE, rising from an average of Dh1.5-Dh2 per kg to around Dh7-Dh8 per kg. Retailers had to source onions from other countries like Turkey, Iran, and China to meet demand.
- Bilateral Agreements: The UAE and India have a Comprehensive Economic Partnership Agreement (Cepa), which covers various industries, including food items. The agreement facilitates trade and economic cooperation between the two countries.
- Expectations and Benefits: Industry experts anticipate a substantial drop in onion prices in the UAE once Indian exports resume. Prices could decrease by up to 20 per cent, making onions more affordable for consumers. This development is expected to alleviate pricing pressures and enhance the quality of onions available in the market.
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- Consumer Perspective: Consumers can look forward to benefits such as increased affordability and improved quality with the influx of Indian onions into the UAE market. This is particularly significant considering onions’ integral role in various culinary traditions across the UAE.
- Trade Dynamics: While onions were being sourced from countries like Turkey and Sudan during India’s export ban, the resumption of Indian exports is expected to diversify the market and contribute to price stabilization.
Overall, the resumption of Indian onion exports to the UAE signifies enhanced trade cooperation between the two nations and is anticipated to positively impact the UAE’s onion market by offering consumers better pricing and quality options.
