Govt reviewing onion export ban, as local prices fall

Govt reviewing onion export ban, as local prices fall

Weeks after the imposition of a ban on onion exports, the government is assessing the situation and is likely to reconsider the decision to stem sharp fall in the mandi prices of the vegetable.

“The government may allow exports of onion through cooperatives,” a trade source said. Sources said with the arrivals of kharif harvest as well as imposition of exports ban on December 7 till March 31, 2024, the mandi prices at Lasalgaon, Nasik, Maharashtra, the hub of the country’s wholesale trade has fallen to Rs 1500/quintal on Tuesday from around Rs 3700/quintal prevailed prior to the imposition of shipment ban.

“The mandi prices have fallen sharply and its currently prevailing below the cost of production,” Balasaheb Misal, former director, Manmard (Maharashtra) mandi board and an onion farmer, told FE.

According to the department, the modal retail prices of onion declined by 50% to Rs 30/kg on Monday from Rs 60/kg on December 8 when ban on export was announced.

Retail onion inflation rose by a steep 86.46% in November as retail prices in several cities touched Rs 90/kg last month because of delay in arrival of kharif crops and unseasonal rains impacting the crops in Maharashtra and Karnataka.

Meanwhile an official said that the government’s intervention of procuring kharif onion and disposing them simultaneously in the wholesale and retail points have brough down average prices by 30%-35% in the last one month.

The government agencies – farmers’ cooperative Nafed and National Cooperative Consumers Federation of India (NCCF) has procured 20,000 tonne of kharif onions so far against a target of 0.2 million tonne (MT) following the government’s decision to increase buffer stock target t 0.7 million tonn from 0.5 MT for the current fiscal.

NCCF and Nafed are currently selling onion from the buffer stock at a highly subsidised rate of Rs 25/kg to consumers in various towns. Inflation in onion, which had been in the negative zone since September, 2021, rose to 23.18% in August. In February, 2020, onion inflation rose to 140% on year.

In October, to discourage exports and improve domestic supplies, the government had imposed a minimum export price (MEP) for onion at $ 800/tonne which translates into Rs 67/kg.

The government had imposed a 40% export duty on onions in August. The export ban was the first intervention in onion exports since January, 2021. The government has not imposed a ban on onion exports since 2021 which was the norm a few years back.

During the first half of the current fiscal, India has exported 1.31 MT of onion mostly to Bangladesh, Malaysia, United Arab Emirates, Sri Lanka and Nepal. India exported a record 2.5 MT of onion 2022-23, which is an increase of 65% from the previous fiscal.

The estimated production of onion during the 2022-23 crop year (July-June) is around 31.8 MT against 31.7 MT reported in the previous year.