Good crop in Pakistan has dented demand for Indian onion, dragging the export of the farm item from this country down by about 24 per cent in July.
Worse still, the neighbouring nation is now exporting onion to Dubai and some other destinations, which had imported heavily from India in the last fiscal, pushing up its outbound shipment of the commodity to a record 17.6 lakh tonnes.
"India's onion export in the last month declined to 1.30 lakh tonnes, compared with 1.70 lakh tonnes in the year-ago period, mainly due to a slump in demand from Pakistan," said a senior official with Nafed, which oversees onion export.
Pakistan had imported 1,69,918 tonnes of onion from India last year after a failure of the crop. However, since it has harvested a good crop this year, it has not only cut down on its dependence on Indian onion but is also exporting.
Pakistan has purchased about 50,000 tonnes of onion from India so far this fiscal, though the import has virtually stopped since May-end.
"Demand from Pakistan dipped after May, affecting export even in June," the official said.
Though India's onion export so far this fiscal at 6.88 lakh tonnes has exceeded last fiscal's level of 6.19 lakh tonnes, the dip in demand from Pakistan since May-end and its shipment to nations, which would otherwise have imported from India, pose a challenge.