Sindh is set to reap a bumper onion crop amidst growers’ fears of market prices falling owing to abundant supplies; as witnessed in the initial stage of arrival of the commodity in the Karachi market.

A surplus onion crop is a serious issue, worsened by lack of proper storage and dehydration facilities. While the crop supply will be in full swing from next month, its growers are currently getting a low price. A 40kg gunny bag of onion is being sold for Rs400-500 in the wholesale market.

Growers fear that if this trend continues, prices may drop further. Currently, however, the supply of Balochistan’s onion in the market will come to an end before the Sindh crops’ peak supplies hit the market.

Sindh reportedly grows close to 40pc of the country’s total onion production followed by 35pc by Balochistan. Sindh’s Phulkara is the most famous variety of onion and has a good market in the Middle East; but the market potential has not been fully realised due to hassles in logistics.

Onion grower Syed Nadeem Shah complains of a low market price. He says growers are currently selling 120 bags (110kg each) for Rs90,000-100,000, down from Rs400,000-500,000. Farmers are hit by 30-40pc post-harvest losses. With proper handling, the losses could be reduced and harvesting of 1m tonnes could be reached quite easily.

Provincial agriculture department figures showed 666,764 metric tonnes of onion were produced in Sindh during 2014-15, on an area of 49,934ha, while 697,276 metric tonnes were harvested in 2013-14, when the commodity was grown on 52,908ha. Onion is cultivated throughout the year in the province but October-December is the peak season.

An exporter from Karachi, Haji Shahjehan, however, hopes the onion’s price will improve later. He ascribes the current depressing marketing price to a poor quality crop that is now reaching Karachi. He says, somewhat better quality onion is still sold for Rs400/40kg, as against the inferior quality which is sold for Rs150-200/40kg. He says last year per 40kg price of onion was Rs800-1,000/40kg.

Market men believe that traders from Punjab and Karachi, who buy onions now will probably make a

windfall from exports, as future prices improve due to the expected increase in demand. Exporters have yet to strike deals with growers for buying the crop for foreign sales.

Mahmood Nawaz Shah says Sindh needs to improve its varieties and meet international standards to get an adequate price. Farmers lack finances and facilities to compete with other countries, particularly Sri Lanka and Malaysia. He says that last year’s attractive price for Sindh’s onion was due to quality issues in the Indian crop.

Onion growers in Sindh suffer when Punjab imports the commodity from India. Punjab’s traders find it easier to buy Indian onions, as transportation from Sindh is often expensive when compared to trading with India through the Lahore border. Efforts are, however, underway to encourage farmers to export their onion crop themselves and make investments in quality enhancing technology.

A link is to be developed between farmers and their foreign buyers under the World Bank assisted Sindh Agriculture Growth Project for exporting onions, rice, dates, and chillies.

Published in Dawn, Business & Finance weekly, October 3rd, 2016