India lifts ban on onion export amid polls in Maharashtra
India yesterday removed the ban on onion exports subject to a minimum export price of $550 per tonne, a decision that can help boost the income of a large section of farmers and comes amidst Lok Sabha polls in key producing regions, including the state of Maharashtra.
The government, in a balancing act to protect the interests of consumers, has imposed a minimum export price (MEP) of $550 per tonne (around Tk 60 per kg) as well as a 40 percent export duty.
Taking duty into account, shipments will not be allowed below $770 per tonne (around Tk 84 per kg).
"The export policy of onions is amended from prohibited to free subject to MEP of $550 per tonne with immediate effect and until further orders," the Directorate General of Foreign Trade said in a notification.
India imposed the ban on December 8 last year to control surging retail prices of onion in domestic markets. Consumer Affairs Department Secretary Nidhi Khare told reporters that lifting the ban would not lead to any price rises in retail markets.
"Prices will remain stable. If there is any increase, it should be very marginal," she said, adding that the government is committed to protecting the interests of both consumers and farmers.
Onion prices at Lasalgaon market in Nashik district of Maharashtra went up by an average of ₹200 per quintal after the Union Government yesterday lifted the ban on exports. Lasalgaon is the biggest wholesale onion market.
Average prices of onions have increased by around ₹200 per quintal, and farmers will benefit from the decision, said Balasaheb Kshirsagar, chairman of the Agriculture Produce Market Committee (APMC).
Political sources said the main reason for removing the ban is the coming Lok Sabha polls in onion-growing areas of Maharashtra, which is electorally crucial because it has the second-highest number of seats (49) after Uttar Pradesh (80).
Prime Minister Narendra Modi is seeking a rare third consecutive term in office since assuming the top post in May 2014. His party's performance in the ongoing elections holds the key to his objective.
Onion traders and farmers, especially from Maharashtra, have been demanding the lifting of the ban, contending it would assist farmers in getting better prices. However, the government had remained hesitant, fearing that the export of this crucial kitchen staple could lead to a surge in domestic prices.
Last month, the main opposition Congress attacked the government of Prime Minister Narendra Modi for neglecting Maharashtra's onion farmers affected by the export ban.
They mentioned that their manifesto pledges a predictable import-export policy to avoid sudden and harmful policies being enforced on farmers.
In December last year, India clamped the ban on the export of onions till March 31 of this year and allowed their shipments based on permission granted by the central government at the request of other countries. Last month, India extended the export ban on onions until further orders.
To check the soaring price of onions, the Indian government imposed a minimum export price of $800 per tonne from October 28 till December 31, 2023. In August last year, India imposed a 40 percent duty on the export of onions to improve supplies of the staple vegetable in the domestic market until December 31, 2023. On May 3, the government again imposed a 40 percent duty on onion export.
India's onion production for 2023-24 (as per the official data of the First Advance Estimates of the Agriculture Ministry) is projected at about 254.73 lakh tonnes, down from about 302.08 lakh tonnes the previous year.
This decline is mainly attributed to a fall in production in key onion-growing states like Maharashtra, Karnataka, Andhra Pradesh, and Rajasthan.
Meanwhile, the price of the local variety of onions has seen a rise to Tk 65-75 a kg from last week's Tk 58-60, according to the Trading Corporation of Bangladesh.
Several onion traders blamed the price hike on their suppliers, alleging that they were stockpiling onions ahead of Eid-ul-Azha.
The ban's lifting had no immediate impact on the Bangladeshi market, said Md Abdul Mazed, general secretary of the Shyambazar Onion Wholesalers' Association.
"On Friday, onions were sold at Tk 60-62 per kg, which was the same on Saturday [yesterday]."
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