The government has approved exports of close to 0.1 million tonne (MT) of onion to six countries – Bangladesh, United Arab Emirate (UAE), Sri Lanka, Bahrain, Mauritius and Bhutan, since the ban on shipment was imposed in December last year, according to a food ministry’s statement on Saturday.
The total quota for onion shipment approved based on requisition from countries are 99,150 tonne: Bangladesh (50,000 tonne), UAE (34,400 tonne), Sri Lanka (10,000 tonne), Bahrain (3000 tonne), Mauritius (1200 tonne) and Bhutan (550 tonne).
The onion is sourced from Maharashtra and shipped through the National Cooperative Exports Limited (NCEL). “The offer rate of NCEL to the buyers takes into account the prevailing prices in the destination market and also international and domestic markets,” according to the ministry. It stated that onion export prohibition has been imposed to ensure adequate domestic availability against the backdrop of estimated lower Kharif and Rabi crops in 2023-24 as compared to previous year and increased demand in the international market.
Recently the agriculture ministry has estimated that onion production is likely to fall by 16% to 25.47 MT in the current crop year (July-June) compared to 2022-23 due to a decrease of 3.43 MT in Maharashtra, the biggest producer of the staple vegetable.
In addition, the government also approved export of 2000 tonne of high value ‘white’ onions through specific ports – Mundra, Pipavav and Nhava Sheva in Gujarat to West Asia and few European countries. “Being purely export oriented, production cost of the white onion is higher than other onions due to higher seed cost, adoption of good agricultural practice (GAP) and compliance to strict maximum residue limits requirements,” the note stated.
Last month, the government had indefinitely extended the ban on onion exports imposed last year. In December 2023, the government had banned exports of onion till March 31, 2024 after the modal retail prices of the key agricultural commodities doubled to Rs 60/kg from Rs 30/kg reported in September last year. The export of onions to countries is allowed on a case-to-case basis after approval from the inter-ministerial group.
Meanwhile, the government directed National Cooperative Consumers Federation (NCCF) and farmers’ cooperative Nafed to initiate procurement of 0.5 MT of onion at market price for the buffer from the farmers as Rabi harvest has started to arrive in the market. Onion purchased is used as buffer stocking as well as intervention by way of simultaneous procurement and disposal to curb the possibility of spike in prices.
In 2023, Nafed and NCCF had purchased 0.64 MT of onion from farmers for the buffer. “The continuous procurement by the NAFED and NCCF have guaranteed remunerative prices for onion farmers all through the year in 2023,” according to an official note. It stated that the recent decision to extend onion export prohibition has been necessitated by the overall domestic availability against the prevailing international prices and global availability concerns. The modal retail prices are currently ruling at Rs 30/kg against Rs 20/kg reported a year back. Retail inflation was 36.88% in March.