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Despite ban, India allows onion export to five nations

By, New Delhi
Apr 04, 2024 01:36 AM IST

India has allowed onion exports to a few countries on priority in response to diplomatic requests, an official said

India has allowed onion exports to a few countries on priority in response to diplomatic requests, but the world’s largest exporter of the item will continue to ban overseas shipments amid projections of lower output for two years in a row, an official said on Wednesday.

The export ban imposed in December 2023 came on the back of a domestic supply crunch. (HT PHOTO)
The export ban imposed in December 2023 came on the back of a domestic supply crunch. (HT PHOTO)

The export ban imposed in December 2023 came on the back of a domestic supply crunch and after a 40% export tax failed to cool prices, which had more than doubled to reach 100 a kilo in some cities.

The Union government has allowed the export of 50,000 tonnes of onion to Bangladesh and 550 tonnes to Bhutan, apart from 3,000 tonnes to Bahrain, 1,200 tonnes to Mauritius and 14,400 tonnes to the UAE, the official said.

“These countries traditionally depend on India for part of their onion supplies and some of them are our immediate neighbours. So, they get priority,” the official cited above said.

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India is expected to harvest 19.3 million tonnes of rabi or winter-grown onions during 2023-24, which is about 18% lower than the production of 23.6 million tonnes in the previous season, according to official projections.

Rabi or winter-harvested onion is critical for country’s availability as it contributes 72-75% of India’s annual production. It is also crucial for ensuring year-round availability as it has a better shelf life compared to kharif or summer onion, and therefore can be stored for supplies till November-December.

Onion is a highly volatile commodity whose supplies tend to run low during an annual summer lean season. Since the bulb is the base ingredient of most Indian dishes and therefore widely consumed, consumers are quite sensitive to a rise in onion prices, relative to many other commodities.

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The Union government has also started procuring onions from farmers, beginning April 1, at market rates to build an emergency reserve of 500,000 tonnes for 2024-25. The buffer will be used to ramp up supplies and keep prices stable, according to an official of the consumer affairs ministry.

“The Union government has directed two state-backed food agencies – the NCCF and NAFED -- to initiate procurement of 5 lakh tonnes of onion for the buffer requirement directly from the farmers as the rabi-2024 harvest started arriving in the market,” a second official said. Procurement refers to the government’s purchases of farm produce for state-held reserves.

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For the procurement, NAFED and NCCF will pre-register onion farmers to ensure that payments to the farmers are transferred to their bank accounts through direct benefit transfer, according to the government’s directive.

The department of consumer affairs had, through NAFED and NCCF, purchased about 600,000 tonnes of onion during 2023-24 for the government’s reserves. These agencies then intervened in retail markets, selling the vegetable at a subsidised price of 25, when market rates had more than doubled due to a supply crunch in 2023. The buffer currently has just about 20,000 tonnes and needs to be replenished.

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