The ban on onion exports will continue till the end of the current fiscal while shipment of essential vegetables is allowed on request from countries, a senior official said on Tuesday. The clarification follows a spike in onion prices in key markets after Monday’s decusion to allow exports of around 0.3 million tonne (MT) of onion to Bhutan, Bangladesh, Sri Lanka and Mauritius.
“Ban on onion export will continue till March 2024. However, the government allows shipment of food items, including onion to countries for which requests come through diplomatic channels” an official said.
Average mandi prices of key vegetable at the Lasalgaon, Nashik, Maharashtra.on Tuesday rose by 25% to Rs 1500/quintal from Rs 1200/quintal prevailed last week. When the government imposed ban on onion exports in December, the mandi prices in Lasalgaon was Rs 4500/quintal.
The wholesale prices of onion at Azadpur mandi, Delhi, Asia’ biggest market for fruits and vegetables also rose to Rs 1800/quintal from Rs 1500/quintal in the last week.
However, according to the department of consumer affairs, modal retail prices of onion rose to Rs 25/kg on Tuesday from Rs 20/kg prevailed last week.
Jaydutt Holkar, director, agricultural produce market committee (APMC), Lasalgaon, told FE that prices are likely to fall in the next few days as the quantity of exports approved is small to make any major dent in domestic supplies. He said the rabi harvest will start arriving in the market by March 15.
Officials 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 60/kg from30/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-November of the current fiscal, India has exported around 1.62 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.