India Faces Onion Glut as Gulf Demand Falls, Farmers Forced to Sell Cheap

However, the ongoing conflict in West Asia, particularly the escalation of tensions between the United States, Israel, and Iran, has impacted trade activities in these countries. As a result, onion exports have declined by approximately 30 percent. Exports to Gulf countries have declined by 55-60 percent.

This has directly impacted the domestic market. Onions previously exported abroad are now waiting for customers in the domestic market. This has led to a sudden increase in supply, but not as much demand. In wholesale markets in many cities, onions are selling for ₹800-₹1000 per quintal, while production costs range from ₹1800-₹2200 per quintal.

Vikas Singh, National Vice President of the Horticulture Produce Exporters Association of India, says that rising shipping costs have further worsened the situation. Until a few months ago, the freight for a container was between ₹500-₹800, but now it has risen to ₹6000-₹7500.

In such a situation, exporting has become a loss-making proposition for traders. As a result, exporters are withdrawing, directly impacting farmers' incomes. The Gulf crisis has also weakened domestic demand. The slowdown in the hotel and restaurant sector and the erratic LPG supply have impacted consumption.

In addition, traditional buyers like Bangladesh have also reduced their purchases over the past two years, further weakening demand. Although production is expected to decline slightly this year, there has been a decline of approximately 10-11 percent nationally, but due to the decline in exports, onion availability in the country remains adequate. This means that despite the decline in production, prices are not rising because the commodity is available in abundance within the country.