India slaps indefinite ban on onion exports

India has extended its ban on onion exports indefinitely -- a surprise move that comes ahead of a general election.

Imposed in December, the ban was due to expire on March 31. Traders had anticipated it would be lifted as local prices have more than halved since the export restrictions were implemented and this season's crop is yielding fresh supplies.

However, the government issued an order late on Friday that the ban will remain in place until further notice, reports Reuters.

"The extension is surprising and completely unnecessary, considering the falling prices with rising supplies from the new season crop," said an executive at a Mumbai-based export firm, who declined to be identified.

Onion prices in some wholesale markets in Maharashtra, the biggest onion-producing state, have fallen to Rs 1,200 rupees ($14) per 100 kg from Rs 4,500 in December, the executive said.

Prime Minister Narendra Modi is seeking a record-equalling third straight term in upcoming elections that will be held over almost seven weeks from April 19.

Bangladesh, Malaysia, Nepal and the United Arab Emirates rely on imports from India, the world's biggest exporter of onion, to fill domestic gaps in onion supply.

Meanwhile, the prices of the essential cooking ingredient did not increase at the wholesale and retail markets in Dhaka yesterday following the extension of the ban by India, reports our staff correspondent.

Traders said most of the businesspeople were unaware of India's decision. In the afternoon, sale of onion increased slightly in the wholesale markets.

Retailers and wholesalers at Ibrahimpur, Kachukhet and Karwan Bazar kitchen markets said there was enough supply of onion as growers were harvesting their crop now.

Sajib Sheikh, proprietor of Matribhandar Trading House at Karwan Bazar, told The Daily Star that most of the traders did not know about the extension of the ban by India.

"Onion prices started dropping four days ago due to increased supply during Ramadan," he said.

Sajib said wholesalers sold onion for Tk 50 to 54 per kg yesterday, down from Tk 115 per kg three weeks ago.