The ban on the export of onion came into effect on September 30 last year, amid spiralling onion prices.
Apprehending a glut in onion supplies in a month from now, and a possible crash in mandi prices, which can potentially hit the farmers, the commerce ministry has started consultations with the ministries of agriculture and consumer affairs to lift the ban on export of the vegetable. The ban came into effect on September 30 last year, amid spiralling onion prices.
There has been 22-56% fall in the retail prices of onion in the four metros — Delhi, Mumbai, Kolkata and Chennai — in the past 20 days. Onion prices were Rs 52/kg in Delhi, Rs 70 in Mumbai, Rs 50 in Chennai and Rs 40 in Kolkata on January 20, says consumer affairs ministry data. The prices were as high as Rs 150-200/kg in the November-December period.
The export restriction is aimed at increasing the availability of the edible bulb in the domestic market and contain the price rise. The government has also imposed stock limits on traders and has asked state-run trading firm MMTC to import about 36,000 tonne of onion.
India had exported onions worth about $115 million in the August-September period while the shipments were $154.5 million during the first four months of FY20. The exports were to the tune of $496.82 million in 2018-19.
Earlier this month, the consumer affairs ministry officials had claimed that the domestic supplies were estimated to be higher at about 29 lakh tonne in March, against about 26 lakh tonne in the same month last year. In February, though the supplies are expected to be lower year-on-year, there will be a significant improvement from the current level.
The price rise in onion started from mid-August when the government first decided, on August 21, to put a cap on the retail price at Rs 24/kg for sales through the Safal (a unit of Mother Dairy) outlets by supplying from the buffer stock. It also had warned traders not to hoard the commodity and threatened to bring back the minimum export price (MEP) system. Notwithstanding the announcements, the prices continued to rise. Only in November last year, consumer affairs minister Ram Vilas Paswan admitted that the prices had gone up due to about 30% (year-on-year) shortfall in production of kharif onion, which normally comes to market from November.