2010

DEHYDRATED ONION
PROJECT

Shreekant Nair
I. Preliminary Report
Synthite Industries Limited
27/10/2010
Introduction:

Onion is one of the important vegetable crops grown in India. Onion is produced in several states
in India, with Maharashtra being the leading producer accounting for about one-fourth of the
country’s onion production. India largely produces red onions used as fresh produce in the
domestic market. White onions (used for dehydration) are grown on commercial scale only in the
states of Maharashtra and Gujarat and that too only in a few districts
Overview of onion production in country1 as on 19th July 2010

Area in '000 Production in 1000

Year
HA MT
2001-
495.8 5252.1
02
2002-
424.7 4209.5
03
2003-
553.8 6267.6
04
2004-
613.8 7760.6
05
2005-
703.6 9432.5
06
2006-
768 10847
07
2007-
821 13900
08
2008-
834 13565
09

STATE/UTs ONION
A P
MAHARASHTRA 200.0 3146.0
KARNATAKA 141.3 2266.2
MADHYA PRADESH 57.3 952.3
BIHAR 53.0 972.0
1
http://www.nhb.gov.in/statistics/area-production-statistics.html
 RAJASTHAN 45.0 742.5
GUJARAT 43.4 1078.6
ANDHRA PRADESH 39.0 662.6
TAMIL NADU 35.3 339.7

The production trend of onion from 1991 to 2009 is:

In India, only fresh market onions are grown and that too mostly red onions. White onions are
grown on commercial scale in few states - Maharashtra, Gujarat, that too restricted too few
districts. Red onion is not suitable for dehydration and export primarily due to poor quality, low
productivity, low solids, low pungency level and high reducing sugars. Dehydrator onions are
mostly white, having high solids > 17%; even upto 22-26% total soluble solids (T.S.S.) in some
hybrids; comparatively low moisture content < 84%, globe shaped, having small root base with a
minimum 70 mm diameter. These onions usually have longer shelf-life, free from diseases. Many
white varieties and hybrids suitable for dehydration are cultivated in Europe and North-America.
But they are mostly long-day ones suitable for temperate and sub-tropical long-day conditions.
 The white varieties grown in the state is approx 10% of the area under onions. Hence the total
area covered for the production of onion as of 2008-2009 is 83400 HA.
Application of dehydrated onion product:

1.Onion Flakes

Widely used in varied food preparations wherever alongwith onion flavor & taste, onion's appearance
& texture is desired and can be easily used in salads & other preparations / servings after re-
dehydration.
2.Onion Chopped (Size: 3.0 - 5.0 mm)

Used in dry soups, mixes, specialty ethnic food preparations, canned/dried/frozen vegetable mixes,
dry casserole mixes, stuffing mixes, food service & fast food and particularly when large onion pieces
are desired.
3.Onion Minced (Size: 1.0 - 3.0 mm)

Mainly used in preparation of soups, sauces, canned/dried/frozen foods, salad dressings, meat
products and other food products whenever onion flavor or taste is required.
4.Onion Granules (Size: 0.1 - 0.5 mm & 0.5 to 1.0 mm)

Particularly applied in Vegetables & Meat preparations, gravies, sauces, seasoning salad dressings,
cheese, crackers etc.

5. OnionPowder

Free flowering powder is used in soups, sauces, seasoning, and meat products and suitable for varied
food preparations, particularly when strong onion flavor and taste is desired.
Major Market :

UK, Canada, Germany, Poland, Finland, Denmark, Australia, Spain, Italy, Greece, UAE, France,
Belgium, Netherlands, South Africa, Latvia, Brazil, Colombia, Chile, Argentina, Saudi Arabia,
Bahrain, Philippines, Korea, New Zealand, Japan, Singapore, Israel, South Africa, Russia, East
European countries and many more are the major countries where dehydrated onion products are
exported. According to Maharashtra State Agriculture Marketing Board the export value of onion
from last five years are :

Sr. Year Onion export from India (Qty. in LakhExport value in croresRs.
No. M.T.)
1 2004-2005 9.44 817.49
2 2005-2006 7.70 620.27
3 2006-2007 11.61 1135.42
4 2007-2008 11.01 1285.82
5 2008-2009 16.71 1816.14

Source: www.msamb.com

Companies in onion dehydration business.

Name State
Nature Exports Gujarat
Maharashtr
Jain Irrigation Systems Ltd
a
Murutuza foods pvt ltd Gujarat
Pardes Dehydration Company Gujarat
ABS food technologies Gujarat
Gujarat
PoojaDehy Foods Pvt Ltd

Natural Dehydrated Veg Pvt Ltd Gujarat

Market Potential Analysis of dehydrated onion: U.S.A,
Canada & European market

Consumption of Dehydrated Onion In

1. USA market:
In terms of both farm value and per person domestic consumption, onions are one of the top five
vegetables in the United States. In 2008, the average American consumed approximately 20
pounds of onions. Libya has the highest average consumption rate with approximately 66.8
pounds per year. The demand rapidly increased during the 1970s as the popularity of fast food
hamburger chains featuring onions on burgers and onion rings as side orders increased. In the
1980s, the booming popularity of salad bars increased onion demand. By the end of the decade,
demand continued to moderately increase as the growing popularity of pizza, pasta, salsa and
other ethnic cuisines increased. The booming economy of the 1990s propelled demand for away-
from-home foods, many of which feature onions.

Percent of consumers reporting onion consumption on any given day

 Market Potential of dehydrated onion
Onions: Per capita availability (fresh weight equivalent)
Processed
Year Total Fresh Total Dehydrating

Pounds

1970 11.3 10.1 1.2 1.2

1971 12.2 10.7 1.5 1.5
1972 11.6 10.7 0.9 0.9
1973 11.4 10.2 1.2 1.2
1974 12.7 11.2 1.5 1.5
1975 12.5 10.5 2.0 2.0
1976 11.8 11.0 0.8 0.8
1977 12.4 11.1 1.3 1.3
1978 12.2 10.9 1.3 1.3
 1979 13.4 11.4 1.9 1.9
1980 12.1 11.4 0.8 0.8
1981 11.6 10.7 0.8 0.8
1982 14.2 12.2 2.0 2.0
1983 13.8 12.2 1.7 1.7
1984 14.6 13.1 1.5 1.5
1985 15.2 13.6 1.6 1.6
1986 15.6 13.7 1.9 1.9
1987 14.9 13.4 1.5 1.5
1988 16.2 14.5 1.7 1.7
1989 16.4 14.8 1.6 1.6
1990 16.8 15.1 2.0 2.0
1991 16.6 15.7 1.6 1.6
1992 17.1 16.1 1.4 1.4
1993 18.1 17.2 2.0 2.0
1994 18.1 16.9 0.9 0.9
1995 18.2 17.8 1.3 1.3
1996 18.6 18.3 0.8 0.8
1997 19.2 18.8 0.9 0.9
1998 19.9 18.4 1.1 1.1
1999 20.7 18.5 2.3 2.3
2000 20.0 18.9 1.6 1.6
2001 19.9 18.5 1.0 1.0
2002 19.6 19.3 1.1 1.1
2003 21.2 19.5 1.8 1.8
2004 21.0 21.9 1.5 1.5
2005 23.1 20.9 1.1 1.1
2006 22.7 19.9 1.8 1.8
2007 21.0 21.6 1.0 1.0
2008 23.1 19.2 1.4 1.4

Source: USDA/Economic Research Service. Data last updated Feb. 1, 2010.

If we look at the per capita availability of fresh and dehydrated onion, we can clearly see that the
trend is increasing year by year. Currently the market of dehydrated onion in U.S.A in terms of
quantity is nearly 1.9 Lakh Ton and in terms of value is $ 391 Million

Per capita availability of dehydrated 1.4 pounds (0.63 kg)

onion

Population of USA 310362000

Total market in terms of quantity 1.9 Lakh Tons

1 Kg FOB price of dehydrated onion $2

(average)

Total market in terms of value $ 391 Million

Market Potential

• Quantity 1.9 Lakh Tons

• Value $ 391 Million

2. CANADA MARKET
The dry onion grown for processing market is

Year Production (‘000 T ) Value ( $ Dollar Million)

2004 8 2

2005 5 2

2006 X X

2007 8 2

2008 10 4

Source: Statistics Canada/ Agriculture and Agri-Food Canada Fall Survey

Dry onion import and export figures in Canada from 1995-2005

Year Import Export

‘000 ‘000
 Tons Tons
120.6
1995 7 30.28
114.8
1996 6 37.89
126.6
1997 7 28.79
127.8
1998 4 49
134.8
1999 8 35.66
133.6
2000 9 36.78
156.4
2001 3 59.91
157.5
2002 3 57.38
166.1
2003 2 54.98
150.5
2004 8 61.38
2005 154.5 58.23

Source: UN Food & Agriculture stats.

3. Europe Market

Dry onion import and export figure in major European countries from 1995-2005

IMPORT Volume in '000 Tons

Avera
Countries ge
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
303,84 314,07 233,66 269,03 256,35 244,4 269,5 263,0 276,4 272,7 227,4 266,42
Germany 0 6 3 7 0 02 00 59 97 96 58 5
107,16 114,90 117,9 128,8 144,4 148,8 158,3 153,5 122,64
Belgium 83,956 91,693 99,431 8 6 81 02 35 20 33 50 3
116,06 90,25 122,9 123,6 117,5 118,2 95,22 103,26
France 91,318 76,760 98,830 1 85,077 5 05 09 30 93 6 0
Netherlan 106,04 118,92 101,5 82,00 107,5 83,93 84,45 87,84
ds 92,576 84,920 70,928 2 8 27 0 28 0 5 0 92,789
39,19 52,09 49,47 61,92 60,10 44,93
Italy 16,264 24,684 30,559 22,679 20,362 0 3 1 3 8 7 38,388
Portugal 10,875 21,477 23,097 27,260 22,096 30,19 44,34 34,76 36,76 35,57 30,24 28,791
 9 2 1 4 8 6
23,90 21,39 25,14 24,31 29,82 29,61
Sweden 26,090 26,862 20,250 22,344 20,689 8 5 1 7 2 4 24,585
26,79 35,98 35,93 20,43 50,48 27,84
Spain 30,008 23,484 33,136 42,435 19,972 3 1 0 5 0 8 31,500
20,78 33,70 43,82 54,93 51,06 18,45
Poland 32,696 4,973 36,959 75,823 22,240 9 0 5 5 4 5 35,951
12,60 16,19 13,03 15,16 16,53 12,03
Austria 11,958 15,084 16,819 20,562 10,184 1 7 0 5 6 1 14,561
18,40 12,34 10,53 12,00
Slovenia 7,976 8,599 9,034 9,667 24,752 2 9,758 9,457 2 5 4 12,048
23,16 10,28 22,51 13,61 10,83
Hungary 385 83 8,687 7,195 1,449 4 9,344 5 5 3 1 9,777
15,32 15,86 22,91 29,63 23,09
Greece 13,248 10,602 13,862 9,804 3,247 2 4 9 2 2 9,183 15,161
14,56 14,34 10,74 11,59 10,98
Denmark 9,858 9,102 11,329 9,967 16,302 8 7 5 3 2 8,717 11,592
Finland 5,338 5,565 5,206 7,609 6,734 6,390 4,473 5,217 5,423 6,290 5,164 5,764
Switzerlan
d 7,879 3,336 3,063 8,047 5,268 4,334 6,325 7,665 5,713 9,706 3,297 5,876
Norway 3,665 1,406 1,719 4,891 4,262 4,220 5,035 5,453 4,178 3,404 3,114 3,759
Luxembo
urg -- -- -- -- -- 1,366 2,346 2,015 1,901 1,841 1,526 1,833
Total 82402

4. International Pricing Trend of Dry Onion Bulb

*cents/pound

Season
Commodit
y Year Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. average

Onions, 2006 8.53 8.19 7.60 15.20 16.30 17.80 14.90 13.30 12.40 10.40 11.40 16.60 16.10
22.1
dry bulb 2007 0 26.20 35.00 55.20 24.20 24.60 15.40 10.80 5.57 4.47 4.70 4.39 11.10

2008 4.13 3.15 2.53 10.60 23.90 17.60 13.10 8.72 11.20 11.50 10.90 9.71 12.50

2009 9.47 8.44 6.99 18.40 13.40 18.00 10.80 8.58 9.24 8.23 7.97 7.93 12.20
11.9
2010 0 16.70 40.00 60.40 43.90 29.20 24.20

The market for dehydrated vegetables is estimated at 900,000 tones. Onions and garlic account
for the biggest portion of this demand, 27% and 13%, respectively. The global market for
dehydrated onions is expected to grow at a compounded annual rate of 5% for the next four
years. The major markets for dehydrated onions are in the USA, Europe and Japan. Dehydrated
onions are widely used by manufacturers of soups, sauces, pizzas, ketchups, and fast-foods.
II. SWOT Analysis
Strengths Weakness
• Established in market as
quality ingredient manufacturer
• Strong customer base, they will
be the potential customer for
dehydrated onion.
• Our major strengths would lie
in producing quality products.
Opportunities Threats
• Highly untapped market hence • Competition faced by highly
huge potential is there established player Jain
• Market is estimated at 243000 Irrigation Systems Ltd whose
Tons current revenue from this
sector is 400 Cr.
• Procuring raw material from the
belts of Maharashtra where
Jain’s have good control over
farmers through contract
farming.
Conclusions:
• The dehydrated onion market looks highly potential because the market is estimated at
243000 Tons.
• There is a growing demand for dehydrated onion products in Western countries.
• The dehydrated onion plant can be used for the dehydration of vegetables during off
season. Dehydrated garlic, carrot, peas, tomato are in great demand from Western
countries.
• The location would be a major factor: Gujarat (Rajkot, Mahuva) and Maharashtra
(Nashik) seems to be the potential location due to easy availability of raw materials and
easy access to ports.

Source of Information:
• www.jains.com
• www.ers.usda.com
• Horticulture board of India
• NAFED: National Agriculture Cooperative Marketing Federation Of India Ltd
• United Nations Food & Agriculture Stats
• Maharashtra State Agriculture Marketing Board