The government’s decision to allow onion exports at a minimum price of $ 770/tonne might not result in significant shipments from the country because of the higher price band approved compared to prices offered by other countries such as Pakistan and China, traders said.
On Saturday the government lifted a ban on onion exports imposed in December last year and put a minimum export price (MEP) of $550/tonne and 40% export duty on the staple vegetable. This made effectively onion shipments to be allowed at a minimum price of $ 770/tonne or around Rs 64/kg.
“Current price band is on the higher side and the government has to reduce export duty on onion for making shipment from India competitive in the globally,”Jaydutt Holkar, director, agricultural produce market committee (APMC), Lasalgaon, Nashik – the hub of the country’s wholesale trade, told FE. He said that a price brand of Rs 45-50/kg would help boost shipments of onion.
Balasaheb Misal, former director, Manmard (Maharashtra) mandi board and an onion farmer said that prices approved for exports is on quite high not realistic. .
According to a report in Dhaka Tribune, the retail onions prices in Bangladesh, India’s biggest export destination for the key vegetable, dropped to Tk 60 (Rs 45.72) on Sunday from Tk70 (Rs 53.34) prevailed last week.
Meanwhile, mandi prices of onion at Lasalgaon, on Monday appreciated by around Rs 4/kg from an average price of Rs 15/kg last week, following the government’s decision to lift ban on onion exports on Saturday.
Correspondingly wholesale prices of the key vegetable in Azadpur mandi (Delhi), one of the biggest markets for vegetables and fruits rose to Rs 22/kg from Rs 18/kg prevailed last week. However the all India retail modal prices on Monday was Rs 25/kg which Budhiraja, a trader in Azadpur mandi said is likely to increase by around Rs 5/kg in next few days.
The government’s announcement to lift the onion shipment ban comes just before the next phases of theLok Sabha election, when the onion growing regions of Maharashtra will go to the polls. Farmers here have been demanding lifting the ban on exports, as modal mandi prices at Lasalgaon are around Rs 15/kg, which is close to cost of production.
On the rationale behind lifting export ban, Nidhi Khare, secretary, department of consumer affairs, had stated the estimated rabi crop (2024-25), which has a share of around 60% total annual output, is projected at around 19.1 million tonne (MT), which is ‘reasonably comfortable’, considering monthly domestic consumption is around 1.7 MT.
“With a good kharif prospect with ‘above-normal’ monsoon forecast, the availability of onion is comfortable till arrival of kharif output,” Khare had said.
While the government last year had put onion export under ‘prohibited’ category, it 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.
In FY24, India exported around 1.8 MT of onion, mostly to Bangladesh, Malaysia, UAE, Sri Lanka and Nepal. Retail inflation in onions was 36.88% in March.
The export ban in December last year 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.
