UAE: Will onion prices increase as India announces 40% duty?

India, the world’s biggest exporter of onions, recently announced a 40 per cent duty on the vegetable. Despite the UAE being among the biggest markets for Indian onions, retailers in the country have said that the move won't affect availability or prices of the staple.

According to industry executives, there is no shortage of onions in the UAE as the vegetable is also sourced from other major markets such as Turkey, Egypt, Greece, the US and Italy.

India decided to levy the duty as prices are likely to increase due to a supply-demand imbalance. This comes after the south Asian country banned exports of non-basmati white rice recently in order to curb rising prices.

V. Nandakumar, director of marketing and communications, Lulu Group International, said the retail major does not expect any major negative impact due to the export duty.

“Last year, around this time, India had banned exports of onions. We anticipated that it would happen this year. We are prepared and have been alternatively sourcing it from Turkey, Egypt, Greece and some other neighbouring countries,” Nandakumar told Khaleej Times.

Kamal Vachani, group director and partner at Al Maya Group, said the UAE is well prepared for a shortage of any commodity wherever they’re sourced from.

“The UAE consumers will always get the best pricing and there will be no shortages of any foodstuff as the government keeps a very strict watch on the demand and supply of commodities to ensure the availability of foodstuff at right prices,” added Vachani.

Staff working at a popular supermarket chain in Sharjah also confirmed that there is no concern of shortage as there are multiple alternative source markets to import onions. “We don’t see shortage or price rise of onions,” said an employee.

In India, the supply-demand imbalance is expected to reflect in onion prices towards end-August, according to analysts. "As per our ground interactions, prices are expected to show a significant increase from early September in the retail market, reaching up to Rs60-70 per kg during the lean patch,” said Crisil Market Intelligence and Analytics.

ALSO READ:

• UAE temperatures soar: Here is a Korean 'cure' to beat the summer heat

• Pay with onions at Manila store today: Look at what Filipinos bought with 'new currency'

• Business
• India