Govt approves onion exports of 0.3 MT to select countries

The government has approved exports of around 0.3 million tonne of onion to countries including Bhutan, Bangladesh, Sri Lanka and Mauritius on a government-to-government basis following their request.

Sources said that an official notification is expected soon. The shipment is likely to be executed by March31, 2024.

A senior official told FE that there would not be any blanket lifting of the ban on shipment of onion exports imposed in December, 2023. Instead, shipment would be allowed in limited ways with “terms and conditions”.

Farmer groups who have been demanding a total lifting of the ban on onion exports, because of sharp fall in mandi prices, said that the volume of exports approved is too small to boost prices in the domestic market.

According to the department of consumer affairs, the modal wholesale prices of onion dropped to Rs 2000/quintal on Monday from Rs 5000/quintal prevailed on December 8, 2023, when ban on exports was announced.

Retail modal prices have softened to Rs 20/kg at present from Rs 60/kg in December last year.

Sources said that a team of officials had visited key onion growing states to assess the onion stocks and it has been found that there is sufficient stock of the vegetable currently available to meet the demand for the next two months.

“The rabi harvest is likely to peak in April,” an official said, adding that rabi harvest constitutes about 60% of the total output and is stored for supplies till October.

Retail inflation of onions rose by 29.59% in January 2024 on year. In December, the prices of key kitchen staple prices rose by 74.17% on 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 three months back.

In October, 2023, to discourage exports and improve domestic supplies, the government had imposed a minimum export price (MEP) of onion at $ 800/tonne, which translates into Rs 67/kg.

Earlier, the government had imposed a 40% export duty on onions in August last year.

During April-December of the current fiscal, India has exported around 1.6 million tonne (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 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.

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.