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Home / India News / Govt imposes ban on export of onions

Govt imposes ban on export of onions

In the April-July period, export of onions rose an unusual 30%, causing prices to show signs of firming up.

india Updated: Sep 15, 2020, 03:08 IST
Zia Haq
Zia Haq
Hindustan Times, New Delhi
A notification by the Directorate General of Foreign Trade (DGFT) on Monday said that exports of onions, which were so far “free”, now stood “prohibited with immediate effect”.
A notification by the Directorate General of Foreign Trade (DGFT) on Monday said that exports of onions, which were so far “free”, now stood “prohibited with immediate effect”. (Sanchit Khanna/HT PHOTO)

The Union government on Monday banned export of all varieties of onions, anticipating a supply crunch in the coming weeks, as exports surged.

In the April-July period, export of onions rose an unusual 30%, causing prices to show signs of firming up.

A notification by the Directorate General of Foreign Trade (DGFT) on Monday said that exports of onions, which were so far “free”, now stood “prohibited with immediate effect”. A key kitchen staple, onions tend to suffer frequent price and supply volatility.

The government had last banned onion exports on September 29, 2019, after a bad crop crimped output. In December 2019, prices soared to Rs 80 per kg in the national capital. The government had lifted the ban on March 15, 2020.

Retail prices this week rose to Rs 40 a kg from Rs 30 a kg in several cities.

According to official trade data, the country exported US $328 million worth of fresh onions and US$ 112 million worth of dried onions in 2019-20. Between April and July 2020, exports of onions to neighbouring Bangladesh soared 157.7%.

Since the bulb is a common base ingredient of most Indian dishes and widely consumed, consumers are quite sensitive to a rise in onion prices, relative to many other commodities.

The country’s consumer or retail inflation in August rose 6.69%, slightly lower than 6.73% recorded in the previous month, according to government data released on Monday. According to the consumer price index data, food inflation in August fell marginally to 9.05%. Yet, overall food & beverages inflation rose to a high of 8.3% in August, Monday’s data showed.

“Retail inflation in last five months have been in excess of 6%. Unless retail inflation in September 2020 declines sharply to around 4.5%, the retail inflation in three consecutive quarters will exceed 6% and monetary policy committee (of the Reserve Bank) will have to respond to the government on the steps taken to keep inflation in 2-6% range,” said Sunil Kumar Sinha, Principal Economist, India Ratings and Research in a statement. High inflation shrinks the scope of Reserve Bank of India to lower lending rates to boost sagging growth.

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